Opinion
No. WD 59196 (Consolidated with WD 59197)
December 26, 2001 Amended: March 5, 2002
Appeal from the Circuit Court of Cole County, Missouri, The Honorable Thomas J. Brown, III, Judge.
Gary W. Duffy, Jefferson City, MO, for Appellants MGE and LaClede Gas Co.
Robert J. Hack, Kansas City, MO, for Appellant MGE.
Michael C. Pendergast, St. Louis, MO, for Appellant LaClede Gas Co.
Jeffrey A. Keevil, Columbia, MO, for Appellant Trigen-Kansas City Energy Corp.
James M. Fischer, Jefferson City, MO, for Appellant Atmos Energy Corp.
James B. Lowery, Columbia, MO, and Joseph H. Raybuck and Thomas M. Byrne, St. Louis, MO, for Appellants, Ameren Corp. and Union Electric Co.
Dana K. Joyce and Lera L. Shemwell, Jefferson City, MO, for Respondent Missouri Public Service Commission.
Douglas E. Micheel, Senior Public Counsel, Jefferson City, MO, for Intervenor-Respondent Office of the Public Counsel.
Before Smith, P.J., and Smart and Howard, JJ.
Atmos Energy Corporation (Atmos); Missouri Gas Energy (MGE); Laclede Gas Company (Laclede); Trigen-Kansas City Energy Corporation (Trigen); Ameren Corporation (Ameren); and Union Electric Company (UE), d/b/a as AmerenUE, appeal the judgment of the Circuit Court of Cole County affirming the final orders of rulemaking of the Missouri Public Service Commission (PSC), promulgating 4 CSR 240-20.015, 4 CSR 240-40.015, 4 CSR 240-40.016, and 4 CSR 240-80.015 (the Rules). The stated purpose of the Rules is to regulate transactions between certain regulated public utilities and their affiliates. Among the provisions of the Rules are "asymmetrical pricing standards" that prohibit certain transactions between a corporate utility and its affiliates, unless the mandated pricing standards are met. On appeal, the appellants are contesting the validity of the Rules by challenging the authority of the PSC to promulgate them and the procedure by which they were promulgated, claiming generally that as affected entities they were entitled by law, but failed, to receive contested case procedures before the PSC in voicing their objections to the promulgation of the Rules.
The appellants, Atmos, MGE, Laclede, and Trigen, in their joint brief (Atmos brief), raise seven points on appeal. They claim that the PSC erred in entering its orders of rulemaking promulgating the Rules because: (1) in promulgating the Rules, the PSC failed to provide contested case procedures, as required by § 386.250(6), specifically, that it failed to conduct a hearing at which they were allowed to present evidence opposing the adoption of the Rules and to cross-examine and rebut opposing witnesses; (2) in promulgating the Rules, the PSC failed to "publish the reasons why the proposed rules were necessary and to publish a concise summary of the agency's findings with respect to the merits of testimony or comments opposed to the proposed rules," as required by § 536.021.2 and § 536.021.6(4); (3) the Rules were not based upon substantial evidence "on the record," as required by § 536.016; (4) the Rules, by mandating asymmetrical pricing standards in dealings between regulated corporate utilities and their affiliates, violated § 393.140(5), by not requiring the PSC, before mandating rates and charges, to first adjudicate or determine that "the rates or charges or the acts or regulations of [the utilities were] unjust, unreasonable, unjustly discriminatory or unduly preferential or in any wise in violation of any provision of law"; (5) in promulgating the Rules, the PSC exceeded its "subject matter jurisdiction," as granted in § 386.030 and § 393.140(12), by attempting to regulate businesses not subject to its jurisdiction; (6) the Rules, as promulgated, "contain impermissibly vague, ambiguous and inconsistent provisions, . . . violating state and federal constitutional provisions relating to due process"; and (7) in promulgating the Rules, the PSC was required by § 536.021.2(2) to provide a notice of proposed rulemaking, containing, inter alia, the "legal authority upon which the proposed rule[s were] based," and that the authority cited by the PSC, § 386.250 and § 393.140, did not grant the PSC the authority to promulgate rules, as it did, regulating heating companies or affiliate transactions, rendering the Rules null and void, pursuant to § 536.021.7. In their joint brief, appellants Ameren and UE raise two points on appeal, with the claim of error raised in Point I being the same as that raised in Point IV of the Atmos brief, and the claim of error raised in Point II being the same as that raised in Point I of the Atmos brief.
All statutory references are to RSMo 2000, unless otherwise indicated.
Because we find that the circuit court lacked jurisdiction for its review, under § 386.510, of the appellants' challenges to the orders of rulemaking of the PSC promulgating the Rules, we dismiss for a lack of jurisdiction.
Facts
The PSC is a state agency established by the Missouri General Assembly to regulate public utilities operating within the State. Atmos, MGE, and Laclede are gas corporations and public utilities, as defined in § 386.020, subject to regulation by the PSC. Trigen is a steam distribution company operating as a retail distributor of steam in Jackson County, Missouri, and thus, subject to PSC regulation as a "heating company," pursuant to § 386.020. UE is an electric and gas utility, and an electrical corporation, under § 386.020(15), and a gas corporation, under § 386.020(18), subject to regulation by the PSC as a regulated investor-owned utility company. Ameren is the unregulated parent corporation of UE. Since it is not an electrical or gas corporation, Ameren is not directly subject to the jurisdiction of the PSC.
On April 26, 1999, pursuant to § 536.021, the PSC filed proposed rules 4 CSR 240-20.015, 4 CSR 240-80.015, 4 CSR 240-40.015, and 4 CSR 240-40.016 with the Missouri Secretary of State, citing as authority §§ 386.250 and 393.140. The stated purpose of the PSC in proposing the Rules was to establish various requirements to be observed by electric companies, steam heating utilities, and gas utilities in transactions involving the corporate affiliates or unregulated business activities of such utilities. Among the provisions of the proposed rules were "asymmetrical pricing standards" that prohibited certain transactions between a utility and its affiliates unless the mandated pricing standards contained in the proposed rules were met. Pursuant to § 536.021, the proposed rules were published in the Missouri Register on June 1, 1999. 24 Mo. Reg. 1346-1364.
The PSC established separate cases for each of the proposed rules: Case No. EX-99-442 for electric utilities ( 4 CSR 240-20.015); Case No. HX-99-443 for steam heating utilities ( 4 CSR 240-80.015); Case No. GX-99-444 for gas utilities ( 4 CSR 240-40.015); and Case No. GX-99-445 for gas utilities' marketing affiliates ( 4 CSR 240-40.016). The notice of proposed rulemaking for each of the proposed rules stated that interested parties could file written initial and reply comments and that a "public hearing" would be held. On July 1, 1999, MGE, Trigen, Laclede, and Atmos filed a motion requesting contested case procedures for Case Nos. HX-99-443, GX-99-444, and GX-99-445, alleging, inter alia, that "the far reaching matters addressed by the Proposed Rules are too important to the long-term future of the energy industry in Missouri, and to the interests of utility consumers in general, to be resolved without the type of rigorous examination afforded by the use of contested case procedures." On August 10, 1999, the PSC denied the appellants' motion.
The motion was actually filed on behalf of Arkansas Western Gas Company d/b/a Associated Natural Gas Company (ANG). However, during the pendency of this action in the circuit court, ANG sold all of its Missouri properties to Atmos. Thus, any actions that were taken by ANG will be referred to in this opinion as if they were taken by Atmos.
The legal file does not contain a motion for contested case procedures filed by any of the appellants in regard to Case No. EX-99-442.
There is no indication in the legal file that Ameren and UE ever filed a motion for contested case procedures.
On this same day, the Commission issued a separate order denying contested case procedures for Case No. EX-99-442; however, this order was in regard to a motion filed by other utility companies, not the appellants in this case.
The four cases were consolidated for public hearing on September 13-15, 1999. At the hearing, the appellants objected to the fact that they were not afforded contested case procedures, specifically, the opportunity to cross-examine witnesses. Nonetheless, the appellants submitted comments to the proposed rules and participated in the public hearing. On November 16, 1999, the PSC issued its "Authorization to File Order of Rulemaking With the Office of Secretary of State" in all four cases, with one commissioner dissenting. The orders of rulemaking were filed on November 22, 1999, to be effective thirty days after their publication in the Code of State Regulations.
Commissioner Murray dissented because she found the rules:
. . . more restrictive than necessary and may result in increased costs to utilities and reduced benefits to consumers.
The requirements of asymmetrical pricing and the use of fully distributed cost methodology exceed what is needed to prevent cross-subsidization. These requirements provide an advantage to competitors and a disadvantage to regulated utilities and their affiliates. When the competitive scale is tilted in either direction, the consumer looses [ sic].
On August 19, 1999, pursuant to § 386.500, Atmos, Laclede, and MGE filed an application for rehearing by the PSC in all four cases. On that same day, Trigen filed an application for rehearing in Case No. HX-99-443 only. On December 15, 1999, Ameren and UE also filed an application for rehearing in all four cases. On that same day, Trigen filed an amended application for rehearing and a request for stay as to Case No. HX-99-443, and Atmos, Laclede and MGE filed an amended application for rehearing and a motion for stay in Case Nos. GX-99-444 and GX-99-445. On January 11, 2000, the PSC denied rehearing in all four cases as to the applications for rehearing that were filed on August 19 and December 15, respectively.
On February 4, 2000, pursuant to § 386.510, Atmos, Laclede, MGE, and Trigen filed a petition for writ of review in the Circuit Court of Cole County in Case Nos. HX-99-443, GX-99-444, and GX-99-445, requesting, inter alia, a review of the PSC's order denying contested case procedures and the PSC's orders of rulemaking. On February 7, 2000, Ameren and UE filed an application for writ of review and, pursuant to § 386.520, a motion for stay in all four cases requesting, inter alia, a review of the PSC's orders of rulemaking. The cases were consolidated on February 22, 2000. On February 25, 2000, the court granted Ameren and UE's motion for a stay.
A hearing on the appellants' petitions for review was held on August 25, 2000. The circuit court entered its order and judgment on September 11, 2000. The court found, inter alia, that it had jurisdiction to consider the writs of review and held that "the Commission has the authority to promulgate these rules, and that the rules issued by the Missouri Public Service Commission are constitutional, reasonable, and lawful." Pursuant to a motion filed by the appellants on September 27, 2000, requesting the court to correct and clarify its order and judgment, the court entered its "Order and Judgment Concerning Stay and Order Nunc Pro Tunc" on October 3, 2000. In this order, the court, inter alia, clarified that the stay of the application of the Rules against the appellants was to remain in effect pending any appeal.
No transcript from this hearing was included in the record on appeal.
This appeal follows.
Discussion
Before reviewing the merits of the appellants' various claims of error, we are first required to determine our jurisdiction, sua sponte. Chromalloy Am. Corp. v. Elyria Foundry Co . , 955 S.W.2d 1, 3 (Mo. banc 1997) (citation omitted) . In that regard, the appellants seek review by this court pursuant to § 386.540. It provides, in pertinent part:
The commission and any party, including the public counsel, who has participated in the commission proceeding which produced the order or decision may, after the entry of judgment in the circuit court in any action in review, prosecute an appeal to a court having appellate jurisdiction in this state. Such appeal shall be prosecuted as appeals from judgment of the circuit court in civil cases except as otherwise provided in this chapter. The original transcript of the record and testimony and exhibits, certified to by the commission and filed in the circuit court in any action to review an order or decision of the commission, together with a transcript of the proceedings in the circuit court, shall constitute the record on appeal to the supreme court or any court of appeals.
§ 386.540.1. Our review under § 386.540.1 is, of course, contingent on the circuit court having jurisdiction in the first instance to review the appellants' challenge to the PSC's orders of rulemaking promulgating the Rules. See City of Park Hills v. Pub. Serv. Comm'n , 26 S.W.3d 401, 405 (Mo.App. 2000) (holding that if the circuit court is without jurisdiction to review the action of the PSC, so is the appellate court) . As to the circuit court's review below, the record indicates that it was done pursuant to § 386.510. Thus, in determining our jurisdiction to review this appeal under § 386.540, the question is whether the circuit court had jurisdiction under § 386.510 to review the appellants' challenges to the validity of the Rules. If the answer is no, then we have no jurisdiction to review the appellants' claims of error on the merits, requiring us to dismiss. Id .
The PSC was created and established by the General Assembly in 1913 pursuant to Art. I, § 3 of the "Public Service Commission Act" (the PSC Act), which was enacted in S.B. 1, L. 1913. That section of the Act was initially codified in § 10412, RSMo 1919, which is now numbered § 386.040. The PSC was created for the purpose of "protect[ing] the consumer against the natural monopoly of a public utility, as provider of a public necessity, while at the same time permitting a recovery by the utility of a just and reasonable return." State ex rel. Util. Consumers' Council of Mo., Inc. v. Pub. Serv. Comm'n , 585 S.W.2d 41, 47 (Mo. banc 1979) (citation omitted) . "In pursuance of these policy objectives, Chapter 386 authorizes a public service commission and Chapter 393 sets forth rules for its regulation of electric, gas, sewer, etc. corporations." Id . at 48. As a creature of the legislature, the PSC derives all of its power and authority from state statute. State ex rel. Beaufort Transfer Co. v. Pub. Serv. Comm'n , 593 S.W.2d 241, 246 (Mo.App. 1979) (citation omitted) . Hence, the "lawfulness of its actions depends directly on whether it has statutory power and authority to act." State ex rel. Gulf Transp. Co. v. Pub. Serv. Comm'n of State , 658 S.W.2d 448, 452 (Mo.App. 1983) (citations omitted) .
There is no dispute in this case concerning the PSC's general authority, pursuant to § 386.250(6), to promulgate rules "which prescribe the conditions of rendering public utility service, disconnecting or refusing to reconnect public utility service and billing for public utility service." There is also no dispute as to the PSC's authority to regulate the various businesses of the appellants under Chapter 393, including the authority to promulgate rules. §§ 393.140 and 393.160. However, as the appellants contended below and contend on appeal, the legislature has placed various limitations on the PSC's rulemaking authority in regulating utility companies such as the appellants. With respect thereto, in seeking and obtaining review below by the circuit court of the PSC's rulemaking orders, under § 386.510, the appellants sought to invalidate the Rules, alleging on various bases that the PSC acted unlawfully in their promulgation.
Section 386.510 provides for review by the circuit court of an "order or decision" of the PSC after rehearing by the PSC, pursuant to § 386.500, is either denied or granted. Section 386.510 provides, in pertinent part:
Within thirty days after the application for a rehearing is denied, or, if the application is granted, then within thirty days after the rendition of the decision on rehearing, the applicant may apply to the circuit court of the county where the hearing was held or in which the commission has its principal office for a writ of certiorari or review (herein referred to as a writ of review) for the purpose of having the reasonableness or lawfulness of the original order or decision or the order or decision on rehearing inquired into or determined.
(Emphasis added.) As to applications for rehearing by the PSC, § 386.500 provides, in pertinent part:
1. After an order or decision has been made by the commission, the public counsel or any corporation or person or public utility interested therein shall have the right to apply for a rehearing in respect to any matter determined therein, and the commission shall grant and hold such rehearing, if in its judgment sufficient reason therefor be made to appear; if a rehearing shall be granted the same shall be determined by the commission within thirty days after the same shall be finally submitted.
2. No cause or action arising out of any order or decision of the commission shall accrue in any court to any corporation or the public counsel or person or public utility unless that party shall have made, before the effective date of such order or decision, application to the commission for a rehearing. Such application shall set forth specifically the ground or grounds on which the applicant considers said order or decision to be unlawful, unjust or unreasonable. The applicant shall not in any court urge or rely on any ground not so set forth in its application for rehearing.
(Emphasis added.) In reading §§ 386.500 and 386.510, there can be no dispute that the only review that the circuit court is authorized to conduct under § 386.510 is a review of an order or decision of the PSC on which an application for rehearing has been filed, pursuant to § 386.500, which application has either been denied or granted. Thus, in determining our jurisdiction, sua sponte, the question is whether the orders or decisions of the PSC referenced in §§ 386.500 and 386.510, include orders of rulemaking, or, in other words, whether challenges to the validity of rules promulgated by the PSC can be pursued by way of the review procedures found in §§ 386.500 and 386.510.
We find it worthy of note that the Commission, in its January 11, 2000, order denying rehearing, pondered this same issue. In that regard, the record reflects that the Commission stated:
Several utility corporations filed requests for rehearing by the Commission in respect to the rulemaking proceedings. These requests or applications were filed on August 19, 1999, and additional requests or applications were filed on December 15, 1999. Contested case procedures do not apply in rulemaking proceedings. However, assuming arguendo, that a rulemaking proceeding is subject to a request for rehearing under Section 386.500 , RSMo 1994, and further assuming that the applications and requests have been properly and timely filed, the Commission finds that the applications for rehearing and related motions are unpersuasive and should be denied.
(Emphasis added.) Thus, the Commission, in denying the appellant's request for rehearing, questioned whether orders of rulemaking were subject to rehearing under § 386.500.
When interpreting a statute, we are to ascertain the intent of the legislature by giving the language used its plain and ordinary meaning. State ex rel. Riordan v. Dierker , 956 S.W.2d 258, 260 (Mo. banc 1997); Blue Cross Blue Shield of Kansas City, Inc. v. Nixon , 26 S.W.3d 218, 228 (Mo.App. 2000) ( en banc) . "Where the language of the statute is clear, a court must give effect to the language as written." Mo. Nat'l Educ. Ass'n v. Mo. State Bd. of Educ . , 34 S.W.3d 266, 279 (Mo.App. 2000) ( citing Emery v. Wal-Mart Stores, Inc . , 976 S.W.2d 439, 449 (Mo. banc 1998)) . We have no authority to read into a statute a legislative intent contrary to the intent made evident by the plain language. Id . "A court will look elsewhere for interpretation only when the meaning is ambiguous or would lead to an illogical result defeating the purpose of the legislation." Id . ( citing Spradlin v. City of Fulton , 982 S.W.2d 255, 258 (Mo. banc 1998)) . "If the statutory language is clear and unambiguous, '[t]here is no room for construction even when a court may prefer a policy different from that enunciated by the legislature.'" Id . ( quoting Kearney Special Road Dist. v. County of Clay , 863 S.W.2d 841, 842 (Mo. banc 1993)) .
Neither § 386.500 nor § 386.510 defines "order or decision" so as to restrict or limit the orders and decisions of the PSC that are subject to rehearing by the PSC and review by the circuit court. As such, giving the critical language of those sections, "order or decision," its plain and ordinary meaning, any and all orders and decisions of the PSC, including orders of rulemaking, would arguably be subject to rehearing by the PSC, under § 386.500, and thus, reviewable by the circuit court, under § 386.510. Despite there being no express language of restriction or limitation in §§ 386.500 and 386.510 as to what orders and decisions are subject to rehearing by the PSC and review by the circuit court, this court previously held in City of Park Hills that the "General Assembly never intended in § 386.510 that all agency orders be reviewable." 26 S.W.3d at 406 (emphasis in original) . Admittedly, the issue in City of Park Hills was the reviewability, under § 386.510, of the PSC's order denying a motion to dismiss for a lack of jurisdiction and not, as here, the reviewability of an order of rulemaking. However, City of Park Hills teaches us that §§ 386.500 and 386.510 are not to be read in a vacuum in determining the legislature's intent with respect to what orders and decisions of the PSC are subject to rehearing by the PSC and review by the circuit court.
"Statutory provisions relating to the same subject matter are considered in pari materia. . . ." EBG Health Care III, Inc. v. Mo. Health Facilities Review Comm'n , 12 S.W.3d 354, 360 (Mo.App. 2000) (citation omitted) . We are required to "interpret and apply statutory provisions with reference to each other in order to determine legislative intent." Phillips v. Am. Motorist Ins. Co . , 996 S.W.2d 584, 587 n. 3 (Mo.App. 1999) (citation omitted) ; see also Board v. Eurostyle, Inc ., 998 S.W.2d 810, 814 (Mo.App. 1999). "This court presumes that statutes in pari materia are intended to be read consistently and harmoniously." EBG Health Care , 12 S.W.3d at 360 (citation omitted) . Sections enacted in the same legislative act must be construed together and harmonized if possible, Cronin v. State Farm Fire Cas. Co . , 958 S.W.2d 583, 584 (Mo.App. 1997) (citation omitted), with every clause to be given some meaning. Wollard v. City of Kansas City , 831 S.W.2d 200, 203 (Mo. banc 1992). Headings or titles of a section that appear in the original act as passed by the legislature are "considered as part of that act and [are] weighed when construing the act." Sisney v. Clay , 829 S.W.2d 9, 12 (Mo.App. 1992) (citation omitted) . Where two statutes concerning the same subject matter are unambiguous when read individually but conflict when read together, we will attempt to harmonize them and give effect to both. Riordan , 956 S.W.2d at 260; Wells v. Mo. Prop. Ins. Placement Facility , 653 S.W.2d 207, 213 (Mo. banc 1983).
In determining whether §§ 386.500 and 386.510 are intended to apply to challenges to rules of the PSC, it is helpful to look at the history of the PSC Act, which was enacted in 1913. It contained various references to the PSC's authority to prescribe "reasonable rules and regulations." S ee, e.g., § 10448; § 10468; § 10470; and § 10478.12, RSMo 1919. However, the Act did not expressly define the term "rule" or "regulation," nor did it expressly provide for how they were to be promulgated or what review, if any, was available to challenge their validity. The only reference to any review was found in § 10534, RSMo 1919, which read:
All rates, tolls, charges, schedules and joint rates fixed by the commission shall be in force and shall be prima facie lawful, and all regulations, practices and services prescribed by the commission shall be in force and shall be prima facie lawful and reasonable until found otherwise in a suit brought for that purpose pursuant to the provisions of this chapter.
(Emphasis added.) This statute, however, did not reference rules, only regulations, and did not provide any guidance as to how a suit challenging a regulation was to be brought.
Although not expressly addressing how to challenge rules promulgated by the PSC, the PSC Act, as originally enacted, did contain numerous provisions as to the filing of complaints. In that regard, four of the seven articles of the Act, contained such provisions. In Article III, which covered common carriers, railroads, and street railroads, three sections referenced the filing of complaints, §§ 10455, 10456, and 10469. In Article IV, which covered gas, electric, and water utilities, four sections provided for the filing of complaints, §§ 10478, 10487, 10490, and 10491. In Article V, which covered telegraph and telephone corporations, three sections referenced the filing of complaints, §§ 10501, 10502, and 10511. Of the sections cited, only §§ 10469, 10487, and 10511 provided for rehearing by the PSC under § 10521, the predecessor of § 386.500, and review by the circuit court under § 10522, the predecessor to § 386.510. In addition to the cited sections of Articles III, IV, and V, pertaining to only the regulated companies enumerated therein, Article VI contained two sections, §§ 10518 and 10519, which dealt with the filing of complaints as to all regulated companies. All of the cited sections of the Act pertaining to the filing of complaints with the PSC provided for their filing by the PSC, a person, or a corporation against a regulated company, which had violated an order, rule or regulation of the PSC, or for filing complaints to review rate settings. None of them, however, expressly provided for the filing of a complaint challenging a rule of the PSC.
The seven Articles were as follows: Article I — Public Service Commission — General Provisions, §§ 10410 — 10434; Article II — Provisions Relating to Railroads, Street Railroads, and Common Carriers, §§ 10435 — 10451; Article III — Provisions Relating to the Powers of the Commission in Respect to Common Carriers, Railroads, and Street Railroads, §§ 10452 — 10475; Article IV — Provisions Relating to Gas Corporations, Electrical Corporations and Water Corporations — Regulation of Price of Gas, Electricity and Water, §§ 10476 — 10494; Article V — Provisions Relating to Telegraph and Telephone Lines and to Telephone and Telegraph Corporations — Heating Companies, §§ 10495 — 10516; Article VI — Procedure Before Commission and Courts, §§ 10517 — 10526; and Article VII — Additional Powers of the Commission — Saving Clause, and Statutes in Conflict Repealed, §§ 10527 — 10550.
It is clear from the original version of the Act that the legislature intended: (1) for the PSC to hear those complaints authorized by the Act; (2) for the PSC to rehear or reconsider its orders and decisions entered with respect to those complaints, pursuant to § 10521, now § 386.500; and (3) for the circuit court to review those orders and decisions, after the PSC had ruled with respect to the rehearing, as provided in § 10522, now § 386.510. It is unclear, however, whether under the Act, as originally enacted, the procedures of §§ 10521 and 10522 applied to complaints or challenges to the validity of rules promulgated by the PSC. While it could be argued that they had to have applied inasmuch as the legislature had not, at the time, expressly provided any other review for PSC orders of rulemaking, ultimately, whether they did or did not does not matter to our discussion in that given the 1945 amendments to the Act and the enactment that same year of the Missouri Administrative Procedure Act (MAPA), the legislature made it clear that judicial review of PSC rules was to be by way of declaratory judgment, as provided in § 536.050.
MAPA is codified in Chapter 536. The stated purpose for its enactment was:
to provide for review of the decisions, rules and regulations of administrative officers or bodies existing under the constitution or by law; to define terms, to provide for filing and taking effect of rules, publication of rules, petition for adoption, amendment or repeal of rules; to provide for declaratory judgments respecting the validity of rules or of threatened applications thereof; to provide for handling of contested cases, official notice, examination of evidence, form and manner of making decisions and orders; to provide for judicial review of contested cases; to provide for appeals, to provide for effective date.
S.B. 196, L. 1945. MAPA prescribes "the permissible extent of the review of the proceedings of an administrative agency." State ex. rel. Dail v. Pub. Serv. Comm'n , 203 S.W.2d 491, 496 (Mo.App. 1947). Section 536.010(1), RSMo 1949, defined an "agency" as "any administrative officer or body existing under the constitution or by law and authorized by law to make rules or to adjudicate contested cases." Thus, MAPA, when enacted, was, by definition, intended to apply to the PSC. This would, of course, raise the question of which provision would control if there were a conflict between the provisions of Chapter 386, specifically governing the PSC, and Chapter 536. In that regard, it is well settled that if Chapter 386 actually speaks to the administrative procedural issue in question, it would control, but where it does not, we are to look to MAPA to fill in the gap. State ex rel. Noranda Aluminum, Inc. v. Pub. Serv. Comm'n , 24 S.W.3d 243, 245 (Mo.App. 2000).
MAPA, § 536.010, RSMo 1949, defined "rule" and "contested case" as follows:
(2) " Rule" includes every regulation, standard, or statement of policy or interpretation of general application and future effect, including the amendment or repeal thereof, adopted by an agency, whether with or without prior hearing, to implement or make specific the law enforced or administered by it or to govern its organization or procedure, but does not include regulations concerning only the internal management of the agency and not directly affecting the legal rights or privileges of, or procedures available to the public;
(3) " Contested case" means a proceeding before an agency in which legal rights, duties or privileges of specific parties are required by statute to be determined after hearing.
As noted, supra, in determining whether rules promulgated by the PSC are considered "orders or decisions" subject to review under the procedures of §§ 386.500 and 386.510, we find that Chapter 386 does not define the terms "orders or decisions" or "rules." As such, we are free to look to Chapter 536 for guidance. Id . Although "order" is not defined in Chapter 536, "decision" is. In that regard, § 536.010(3) reads: "The term 'decision' includes decisions and orders whether negative or affirmative in form." (Emphasis added.) While this definition sheds little light on the issue at hand, the definition of "rule" found in § 536.010(4) does.
In 1976, the legislature, in S.B. 478, amended § 536.010(4), rewriting the definition of "rule." Prior to the amendment, the section read:
"Rule" includes every regulation, standard, or statement of policy or interpretation of general application and future effect, including the amendment or repeal thereof, adopted by an agency, whether with or without prior hearing, to implement or make specific the law enforced or administered by it or to govern its organization or procedure, but does not include regulations concerning only the internal management of the agency and not directly affecting the legal rights or privileges of, or procedures available to the public.
§ 536.010(4), RSMo 1969. Pursuant to the amendment, which was effective March 31, 1976, the definition now reads, in pertinent part:
'Rule' means each agency statement of general applicability that implements, interprets, or prescribes law or policy, or that describes the organization, procedure, or practice requirements of any agency. The term includes the amendment or repeal of an existing rule, but does not include:
. . .
(d) A determination, decision, or order in a contested case[.]
§ 536.010(4)(d) (emphasis added) . Given the amending language of § 536.010(4)(d) to the definition of "rule," it is obvious to us that one purpose in so amending was to make it clear that a rule did not include a decision or order in a "contested case," with a contested case being defined in § 536.010(2) as "a proceeding before an agency in which legal rights, duties or privileges of specific parties are required by law to be determined after hearing." As stated by this court in Bruemmer v. Missouri Department of Labor Relations , 997 S.W.2d 112, 116 (Mo.App. 1999) ( quoting Branson R-IV Sch. Dist. v. Labor Indus. Relations Comm'n , 888 S.W.2d 717, 720 (Mo.App. 1994)), whereas an order or decision is an "adjudication" in a contested case, a rule is not an adjudication and does not result from a contested case in that, in contrast to a rule, an adjudication is "'[a]n agency decision which acts on a specific set of accrued facts and concludes only them,'" while a rule is "'[a]n agency statement of policy or interpretation of law of future effect which acts on unnamed and unspecified persons or facts.'" This distinction drawn in § 536.010(4) between a rule and a decision or order in a contested case recognizes the concurrent powers of an administrative agency, including the PSC: (1) the "legislative power," which is "to formulate rules to effect a policy of statute"; and (2) the "judicial power," which is "to decide legal rights." Robertson , 592 S.W.2d at 841. As stated by Judge Shangler in his dissent in Gulf Transport :
In the course of function the Commission exercises mingled governmental powers. When the Commission fixes rates or otherwise promulgates for prospective effect a standard addressed to the public or regulated industry generally, it acts like a lawmaker, and so exercises quasi-legislative power. When the Commission determines facts from disparate evidence and applies the law to come to decision in a particular controversy, it acts as an adjudicator, and so exercises quasi-judicial power.
658 S.W.2d at 465 (citations omitted) .
Recognizing the two distinct powers of state agencies, the legislature and the judicial, the legislature saw fit in Chapter 536 to create separate and distinct procedures of review: (1) review by declaratory judgment, under § 536.050, as to a rule, which represents an "agency statement of general applicability that implements, interprets, or prescribes law or policy, or that describes the organization, procedure, or practice requirements of any agency," § 536.010(4); and (2) review of contested cases, under § 536.140, or uncontested cases, under § 536.150, as to an agency decision or order determining the legal rights, privileges or duties of specific parties. While both contested cases under § 536.140 and uncontested cases under § 536.150 involve agency decisions as to a specific set of accrued facts as to unnamed and unspecified persons, the former provides for a hearing before the agency, whereas the latter does not. Consistent with the proposition that the legislature intended in 1945, with the enactment of MAPA, to subject judicial and quasi-judicial acts of the PSC to direct review by the courts was the adoption that same year of Article V, § 22, of the Missouri Constitution, which read:
All final decisions, findings, rules and orders of any administrative officer or body existing under the Constitution or by law, which are judicial or quasi-judicial and affect private rights, shall be subject to direct review by the courts as provided by law; and such review shall include the determination whether the same are authorized by law, and in cases in which a hearing is required by law, whether the same are supported by competent and substantial evidence upon the whole record.
MO. CONST. art. V, § 22, amended by MO. CONST. art. V, § 18; see State ex rel. State Highway Comm'n v. Weinstein , 322 S.W.2d 778, 784 (Mo. banc 1959) (holding that "the debates in the Constitutional Convention on the adoption of Sec. 22, Art. V, show that it was intended to apply to the Public Service Commission and to quasi-legislative functions of other agencies") .
This amendment was amended in 1976 to read:
All final decisions, findings, rules and orders on any administrative officer or body existing under the constitution or by law, which are judicial or quasi-judicial and affect private rights, shall be subject to direct review by the courts as provided by law; and such review shall include the determination whether the same are authorized by law, and in cases in which a hearing is required by law, whether the same are supported by competent and substantial evidence upon the whole record. Unless otherwise provided by law, administrative decisions, findings, rules and orders subject to review under this section or which are otherwise subject to direct judicial review, shall be reviewed in such manner and by such court as the supreme court by rule shall direct and the court so designated shall, in addition to its other jurisdiction, have jurisdiction to hear and determine any such review proceeding.
The significance of this amendment, adding the second sentence, will be explained, infra.
Further support for the proposition that the legislature intended in 1945, with the enactment of MAPA, to subject challenges to PSC rules to direct judicial review by way of declaratory judgment, under § 536.050, can be found in the fact that when it enacted § 386.250(11), RSMo Supp. 1977, now § 386.250(6), expressly authorizing the PSC to promulgate rules regulating utilities, it made no reference to challenges to their validity being subject to review procedures of §§ 386.500 and 386.510. It did provide, however, that "[a]ll such proposed rules shall be filed with the secretary of state and published in the Missouri Register as provided in chapter 536, RSMo, and a hearing shall be held at which affected parties may present evidence as to the reasonableness of any proposed rule." § 386.250(6). In that regard, § 536.021 provides for the procedure for filing and publishing proposed state agency rules in the Missouri Register. Neither that section nor any other section of Chapter 536 refers PSC rules or rulemaking proceedings back to the procedures of §§ 386.500 and 386.510 for review. Instead, Chapter 536 provides for review of agency rules and rulemaking procedures in a declaratory judgment action, as provided in § 536.050. Riordan , 956 S.W.2d at 261 . Obviously, when the legislature enacted § 386.250(6), it could have expressly made rulemaking by the PSC subject to the review procedures of §§ 386.500 and 386.510, as it did, for example, in § 394.312.6, governing territorial agreements to provide retail electrical service, providing that the "commission shall have jurisdiction to entertain and hear complaints involving any commission-approved territorial agreement. Such complaints shall be brought and prosecuted in the same manner as other complaints before the commission . . ." (Emphasis added.) The fact that it chose not to do so indicates to us a clear intent that challenges to PSC rules were to be subject to the same review as the rules of any other state agency, a declaratory judgment action filed pursuant to § 536.050. Riordan , 956 S.W.2d at 261 .
While we recognize that it is not our place to judge the logic or advisability of enacting a statute or a particular provision thereof where the legislative intent of the enactment is clear, Kearney , 863 S.W.2d at 842 , where it is not clear, we can assume in interpreting the enactment under scrutiny, that the legislature would not intend an illogical and absurd result. State ex rel. GTE N., Inc. v. Mo. Pub. Serv. Comm'n , 835 S.W.2d 356, 367 (Mo.App. 1992) ( citing State ex rel. Lack v. Melton , 692 S.W.2d 302, 304 (Mo. banc 1985)) . With that principle to guide us here, it would seem illogical to us, in what appears at first blush to be an unclear situation as to whether rules of the PSC were intended to be subject to review under §§ 386.500 and 386.510, that the legislature would have intended to set up separate review procedures in MAPA for rulemaking and adjudications as to all agencies, other than the PSC. And, in addition to there being no apparent rationale for such a distinction in the review procedures, as discussed, supra, it appears to us that the legislature in enacting MAPA and adopting the cited constitutional amendments in 1945 intended, with respect to review of agency rulemaking, to place the PSC in the same position as all other agencies.
In interpreting the implicated statutes as we do, we are cognizant of the Missouri Supreme Court's decision in Union Electric Co. v. Clark , 511 S.W.2d 822 (Mo. 1974). There, the Court was faced with the issue of whether the validity of a PSC regulatory rule was subject to review pursuant to the declaratory judgment act or whether § 386.510 was the exclusive means for review. Clark , 511 S.W.2d at 823 . In a division opinion authored by Commissioner Stockard and adopted by the Court, the Court held that the review provided in § 386.510 was the exclusive means by which a utility company could challenge the validity of a regulatory rule promulgated by the PSC. Id . at 825. In holding as it did, the Court relied on the fact that the Declaratory Judgment Act, as found in Rule 100.03, Missouri Rules of Civil Procedure (1969), was only available as an avenue of review where no "other provision for judicial review [was] provided by statute" and that § 386.510 provided for such review. Id . at 824. However, in concluding that § 386.510 was a "special separate statutory procedure for the review" of a challenge to the validity of a PSC regulatory rule, the Court did so without ever referencing § 536.050, the declaratory judgment statute. Moreover, the Court's reference to Rule 100.03 as the basis for ruling that the Declaratory Judgment Act did not apply was in error, since Rule 100.03 was, by its terms, only applicable to contested cases, as defined supra, which did not include rulemaking proceedings. In fact, Rule 100.03 was essentially identical to § 536.100, which applies to adjudications in contested and uncontested administrative agency cases. At the time Clark was decided, Rule 87 governed declaratory judgments. The Court's reliance on Rule 100.03, makes it clear that it considered a challenge to an order of rulemaking to be a contested case, which explains why it summarily concluded, without any discussion or justification being given, that it is "agree[d] . . . that the issues asserted present[ed] a 'contested case' as [that term is] used in Rule 100." Id . In concluding this fact, the Court did not read § 386.510 in pari materia with the other sections of Chapter 386 and did not cite any cases that had previously addressed and decided that issue. Id . at 825. The only case citation by the Court with respect to the applicability of § 386.510 was to dicta in State ex rel. State Tax Commission v. Luten , 459 S.W.2d 375 (Mo. banc 1970), which it cited for the sole proposition that "'Section 386.510 pertaining to the Public Service Commission' [was] a review procedure that was 'entire' within itself," such that there was nothing left to review by way of a declaratory judgment action under Rule 100. Clark , 511 S.W.2d at 825 . In addition, the Court did not discuss the fact, as we did supra, that the legislature, with the enactment of MAPA, had already recognized that agency rules were to be treated differently than contested cases for purposes of review.
Rule 100.03, Missouri Rules of Civil Procedure (1969), reads:
Any person who has exhausted all administrative remedies provided by law and who is aggrieved by a final decision in a contested case, whether such decision is affirmative or negative in form, shall be entitled to judicial review thereof, as provided in Rules 100.04 to 100.08, unless some other provision for judicial review is provided by statute; provided, however, that nothing in this chapter contained shall prevent any person from attacking any void order of an agency at any time or in any manner that would be proper in the absence of this section. Unreasonable delay on the part of any agency in deciding any contested case shall be grounds for an order of the court either compelling action by the agency or removing the case to the court for decision.
(Emphasis added.)
Rule 87.02(c), Missouri Rules of Civil Procedure (1969), provided:
The power of the courts of this state to render declaratory judgments shall extend to declaratory judgments respecting the validity of rules, or of threatened applications thereof, and such suits may be maintained against agencies whether or not the plaintiff has first requested the agency to pass upon the question presented.
A "contested case" was defined at the time in Rule 100.01(3), 1969, as: "a proceeding before an agency in which legal rights, duties or privileges of specific parties are required by law to be determined after hearing." See also § 536.010(2), RSMo 1969.
While harboring serious concerns about the analysis in Clark , we nonetheless recognize that we are bound by the holding therein, MO. CONST. art. V, § 2 (reading, in pertinent part, that decisions of the Supreme Court "shall be controlling in all other courts"), providing, of course, it is still good law. In that regard, our research discloses that since Clark , the Supreme Court has not revisited the issue of whether PSC orders of rulemaking are subject to review under § 386.510, although Clark was followed in several older decisions of this court. See State ex rel. Southwestern Bell Tel. Co. v. Pub. Serv. Comm'n , 592 S.W.2d 184 (Mo.App. 1979); State ex rel. Glendinning Cos. of Conn., Inc. v. Letz , 591 S.W.2d 92 (Mo.App. 1979); Jefferson Lines, Inc. v. Mo. Pub. Serv. Comm'n , 581 S.W.2d 124 (Mo.App. 1979). However, within three years after Clark was decided, the legislature not only amended the definition of "rule" in Chapter 536, but enacted what is now § 386.250(6), authorizing the PSC to promulgate rules in accordance with procedures set forth in Chapter 536, without referencing the review procedures of §§ 386.500 and 386.510, as it had done on other occasions. The legislature is presumed to be aware of the interpretation given to a statute by the appellate courts of this state such that in amending that statute, it intended to change the existing law. A.R.D.C. v. State Farm Fire Cas. Co . , 619 S.W.2d 843, 845 (Mo.App. 1981). Thus, in redefining "rule" in § 536.010(4)(d) in 1976 and enacting a year later § 386.250(6) without referencing §§ 386.500 and 386.510, just three years after Clark was decided, the legislature made it clear that, unlike the Clark court, it was differentiating between an order of rulemaking and an order or decision in a contested case.
It has been noted by a leading Missouri scholar in the area of administrative law that the conclusion reached by the courts in Clark and the cases that followed it is "not so easily reconciled with the implicit purposes of the declaratory judgment remedy." 20 ALFRED S. NEELY, MO. PRACTICE, ADMIN. PRACTICE PROC. § 7.22 (3d ed. 2001). In fact, in discussing these problems in the context of the Jefferson Lines case, Neely points out that the court's requirement that a challenge to rulemaking must be done pursuant to § 386.510 rather than by the declaratory judgment act presented "serious problems." Id .
First, it left little place for the language of the declaratory judgment provision that such actions "may be maintained against agencies whether or not the plaintiff has first requested the agency to pass upon the question presented." Second, it assumed some agency obligation to respond to a rulemaking petition in a manner that would develop some suitable record for judicial review. The MAPA imposes no obligation of this nature. It does not even require a statement of reasons be given the petitioner. Third, it transported review provisions for essentially adjudicatory proceedings, in which records are made and reasons are given as a matter of routine, to rulemaking, and did so in the face of the specific statutory provision for declaratory judgments. In the process the latter, and the legislative intent reflected, were trivialized. Finally, it imposed considerable burdens on the public disenchanted with an agency rule. The efficiency of the declaratory judgment was lost. In its place it substituted an ad hoc system of initial adjudication on the validity of rules, triggered by a petition to amend or repeal.
Id .
Given our interpretation of the implicated statutes, the appellants, in seeking to invalidate the PSC rules in question, were required to file a declaratory judgment action pursuant to § 536.050. Riordan , 956 S.W.2d at 261 ( citing Robertson , 592 S.W.2d at 836 ) . Instead, they first sought rehearing by the PSC, under § 386.500, and when that was denied, review by the circuit court, under § 386.510, and consequently, review by us, under § 386.540. Because the circuit court, for the reasons discussed, supra, lacked the authority under § 386.510 to review the validity of the rules in question, we lack jurisdiction to review the merits of the appellants' appeal, requiring us to dismiss. City of Park Hills , 26 S.W.3d at 405 .
During the pendency of this appeal, the legislature enacted § 386.515, RSMo Supp. 2001, which provides:
Prior to August 28, 2001, in proceedings before the Missouri public service commission, consistent with the decision of the supreme court of Missouri in State ex rel. Anderson Motor Service Co., Inc. v. Public Service Commission, 97 S.W.2d 116 (Mo.banc 1936) the review procedure provided for in section 386.510 is exclusive to any other procedure. An application for rehearing is required to be served on all parties and is a prerequisite to the filing of an application for writ of review. The application for rehearing puts the parties to the proceeding before the commission on notice that a writ of review can follow and any such review may proceed without formal notification or summons to said parties. On and after August 28, 2001, the review procedure provided for in section 386.510 continues to be exclusive except that a copy of any such writ of review shall be provided to each party to the proceeding before the commission, or his or her attorney of record, by hand delivery or by registered mail, and proof of such delivery or mailing shall be filed in the case as provided by subsection 2 of section 536.110, RSMo.
This statute pertains solely to the notice required to be given when applying for a writ of review in a contested case and does not affect our holding in this case. The Anderson case cited in the statute was a contested case proceeding initiated by the filing of an application for a permit to continue their trucking business. 97 S.W.2d at 116. The case did not deal with a proceeding to challenge the validity of a rule.
Conclusion
For the reasons stated, we dismiss for lack of jurisdiction.
Smart and Howard, JJ., concur.