Daily Court Reporter - News Supreme Court of Ohio heard oral arguments last week, including whether the PUCO can allow a utility provider to withdraw its security plan
Supreme Court of Ohio heard oral arguments last week, including whether the PUCO can allow a utility provider to withdraw its security plan
Dan Trevas, Supreme Court of Ohio
The Ohio Supreme Court heard three oral arguments Wednesday, December 6th, including a one made by the Ohio Office of the Consumers’ Counsel contesting the Public Utility Commission of Ohio’s ability to allow a utility provider to withdraw its second Electric Security Plan.
The three cases considered on Wednesday were streamed live online at sc.ohio.gov and broadcast live on The Ohio Channel.
Below is a summary of the three arguments heard on Wednesday. Along with the descriptions in this article, the Office of Public Information has released in-depth summaries of the cases available online at: http://www.courtnewsohio.gov/cases/previews/17/1206/1206.asp#.Wh7WLTdryUk
In the Matter of the Application of the Dayton Power and Light Company for Approval of Its Electric Security Plan, Case no. 2017-0241
Public Utilities Commission of Ohio
May the Public Utilities Commission of Ohio (PUCO) allow an electric utility provider to withdraw its Electric Security Plan (ESP) after the Ohio Supreme Court has ordered revisions to the plan?
Does the Court’s 1957 Keco Industries v. Cincinnati and Suburban Telephone Co. decision prevent the return of unlawful charges back to ratepayers, or does the Court have the right to order prospective adjustments to make up for overpayments by ratepayers?
Does the PUCO’s approval of a provider’s new ESP make the prior plans null and void, and is a legal challenge to the prior plans a moot issue?
The Industrial Energy Users-Ohio, the Ohio Office of the Consumers’ Counsel (OCC), and others challenge the PUCO’s decision to allow the Dayton Power and Light Co. (DP&L) to withdraw its second ESP after the Ohio Supreme Court in 2016 ruled that one of the charges passed on to ratepayers was unlawful. The Court issued a one-page opinion finding the plan’s Service Stability Rider was unauthorized. The decision was based on a more extensive opinion the Court delivered in a decision regarding a similar rider imposed by American Electric Power (AEP) that the Court directed the PUCO to modify. (See Court Approves AEP’s 2012 Rate Plan and Charge for Ensuring Reliability of Electricity in Competitive Marketplace).
As part of Ohio’s move away from electric service monopolies to a competitive marketplace, state lawmakers enacted a series of statutes to direct the industry. Under R.C. 4928.141, service providers such as DP&L, had to provide a standard service offer to its customers, who have the option of accepting power generated by the company or receiving power from another provider. Under Ohio’s system, only the generation portion of the electricity industry is competitive. DP&L and other traditional power providers still charge for and provide the distribution and transmission of power to customers in their regional markets. DP&L serves about 520,000 customers in 24 counties. The standard service offer can take one of two forms, a market rate offer, or an ESP. The PUCO authorized DP&L’ first ESP (ESP I) in 2009 and its second, ESP II, in 2013. ESP II was to be in place for 41 months, and the Industrial Energy Users, OCC and others challenged the plan, claiming it included unlawful charges including a Service Stability Rider (SSR) that was used to subsidize the cost of operating DP&L’s generation business. The SSR was a “non-bypassable” rider, meaning that it’s paid by customers who receive generation from DP&L and also by those who buy generation service from other competitors.
In 2016, the Court directed the PUCO to address impermissible charges in the SSR based on its precedent in the AEP case. The challengers claim that during the 32 months that ESP II was in operation, DP&L improperly collected $285 million from its customers, and they argue the Court’s ruling allowed the PUCO to adjust the company’s future rates to essentially refund the overcharges. Instead of adjusting the ESP II, the PUCO permitted DP&L to withdraw the plan and revert back to a modified version of ESP I. DP&L at that time was already crafting a new six-year plan, ESP III. The challengers claim that the modified ESP I contained a generation-rider that was similar to the SSR, and claim the PUCO has since allowed DP&L to collect another $76 million in unlawful charges.
The Court has consolidated two appeals brought by DP&L opponents into one case to be heard for oral arguments. It includes a challenge to the right of the PUCO to allow the withdrawal of ESP II rather than modifying it to eliminate the SSR. And it includes a challenge to the PUCO’s right to allow the company to revert to a modified ESP I.
As these appeals were pending, the PUCO approved in October 2017, DP&L’s ESP III. The company and the PUCO have claimed the implementation of the new plan, make the issues raised about ESP I and ESP II moot. A week after the implementation the Court ordered the parties in the cases to file supplemental briefs discussing whether the enactment of the new plan makes the issues of the prior plans moot and if they cases should be dismissed.
The Industrial Energy Users and other opponents argue that under R.C. 4928.143(C)(2)(a) the commission isn’t authorized to accept the withdrawal of an ESP after the Supreme Court has ordered a modification. The law requires the power companies to submit an ESP and that the PUCO is allowed to modify and approve it. A power company is allowed to withdraw the plan as modified by the PUCO if it disagrees with the changes and resubmit a new proposal. The plan’s opponents argue that once the Supreme Court ordered the changes, the role of the PUCO becomes ministerial and that it has to apply the findings of the Court. They argue the Court directed the PUCO to eliminate the rider from DP&L’s plan and implement a plan that allows $285 million collected from the ratepayers to be recouped through lower future rates. The opponents argue that the PUCO has no “latitude” or discretion to do anything other than follow the Court’s decision, and that the PUCO had no authority to allow DP&L to withdraw the plan before it ran its 41-month course.
In its supplemental brief, the OCC notes that dismissing the appeal as moot amounts to the PUCO finding a way to disregard orders of the Court. If the PUCO can allow a power company to withdraw a plan once the Court finds a portion unlawful, and substitute it with another plan that lets the power company keeps the unlawfully gained payments, then it’s usurping the power of the Court.
The OCC maintains the implementation of the new EPS doesn’t make moot the appeal for several reasons including that there are issues the Court can address even if the new rate plan takes effect. That includes addressing the Keco decision, which the OCC argues shouldn’t be followed in a new era of utility deregulation. The opponents contend that the Court has the power to order utilities to adjust future rates to compensate ratepayers for past unlawful collections. The OCC also cautions that mooting the issue would be unwise because the same situation is capable of being repeated, yet evading review by the Court. The groups argue that in future cases, utilities who receive Court orders to modify their plans and reduce rates can withdraw them, keep the funds collected, and substitute them with new plans that don’t have the effect of refunding the customers.
Additional appellants in the case include the Ohio Manufacturers’ Association Energy Group, the Ohio Energy Group, and Kroger Co.
State of Ohio v. Gerry L. Moore Sr. aka Gary L. Moore Sr., Case no. 2017-0483
Sixth District Court of Appeals (Erie County)
Does R.C. 2929.14(B)(1)(b), which prohibits the reduction of mandatory prison terms imposed for a firearm specification, violate equal protection rights under the U.S. and Ohio constitutions?
Did the appellate court err when it decided the statute violated constitutional guarantees of equal protection when the parties didn’t challenge the statute’s constitutionality and didn’t brief the issue on appeal?
An Erie County grand jury indicted Gerry L. Moore Sr., also known as Gary L. Moore Sr., for multiple alleged offenses in July 2015. Some of the counts included weapons charges, referred to as firearm specifications.
As part of a plea agreement, Moore pled guilty in April 2016 to felonious assault, kidnapping, failure to comply with the order or signal of a police officer, and inducing panic. The felonious assault offense carried a one-year mandatory firearm specification, and the kidnapping offense included a three-year mandatory firearm specification.
Based on a state law, the trial court ordered Moore to serve the four years for the firearm specifications first and consecutive to his sentence for the other offenses of four years, 11 months, for a total prison sentence of eight years, 11 months.
Moore also was entitled to credit for 283 days he served in jail before he was sentenced. The court noted that Moore would be eligible for judicial release in 4 1/2 years.
Moore appealed his sentence to the Sixth District Court of Appeals, arguing that his 283-day credit should be subtracted from his mandatory four-year sentence for the firearm specifications, rather than from his entire sentence of nearly nine years. The court considered Moore’s constitutional rights based on the equal protection clauses in the U.S. and Ohio constitutions. In a split decision reversing Moore’s sentence, the Sixth District ordered the trial court to apply his jail-time credit against the mandatory part of his sentence rather than his entire prison term.
The Erie County Prosecutor's Office filed an appeal with the Ohio Supreme Court, which accepted the case.
Disciplinary Counsel v. Andrew Mahlon Engel, Case no. 2017-1087
The Board of Professional Conduct recommends the suspension of Andrew M. Engel of Centerville, who was publicly reprimanded by the Supreme Court in 2001, and suspended for two years, with six months stayed, in 2004. The board is recommending Engel now be forced to cease practicing law for six months with the possibility of having to sit out two years if he doesn’t meet certain conditions.
Engel counters that he provided the board sufficient evidence to show he was suffering from a mental health disability at the time of his misconduct and that he is successfully undergoing treatment for the condition. He argues that his behavior warrants a fully stayed two-year suspension as long as he meets the conditions recommended by the board.
In April 2015 Dianne Shelton hired Engel to represent her in a consumer debt matter. She paid Engel a $500 retainer, and he obtained information from Shelton and two municipal courts in order to pursue a settlement with Shelton’s creditor. Shelton had explained to Engel that the debt was preventing her and her husband from financing the purchase of a home.
About two weeks after the initial meeting, Engel sent a letter to the lawyer for the creditor. More than a month later, Shelton called Engel seeking information about the status of her case and was unable to reach him. In mid-June Engel promised to call the opposing attorney to follow up, and then sent a follow up letter to the creditor’s lawyer. Between June and mid-August, Shelton repeatedly tried to reach Engel about the status of her case, and Engel didn’t respond to phone calls or emails. By mid-August, Engel hadn’t spoken directly to the opposing attorney, and Shelton field a grievance against Engel with the Office of Disciplinary Counsel.
In September 2015, Engel responded to Shelton by email and sent another follow up letter to the opposing attorney. At the time he wasn’t aware of the grievance Shelton filed against him. In October, the disciplinary counsel sent a letter of inquiry to Engel, and Engel responded later that month. In November, he told the disciplinary counsel he would contact Shelton and ask if she wanted him to continue to represent her or return her fees.
But Engel didn’t respond to follow up contacts from Shelton or the disciplinary counsel until February 2016. She agreed to allow Engel to continue to represent her, but after not hearing from him for several weeks, she settled her debt herself in March 2016. After being informed of the settlement, Engel promised to refund Shelton the “balance” of her $500 retainer. In May 2016, Engel sent Shelton $50. The disciplinary counsel continued to request documentation from Engel who appeared for a June 2016 deposition. Weeks after the deposition, Engel sent a letter to Shelton apologizing for her failure to respond to her, and refunded the remaining $450 of her retainer.
A three-member panel of the board found Engel violated several rules of professional conduct while representing Shelton, including a requirement that he act with diligence to resolve her legal matter, and failing to keep her reasonably informed about the status of her case. The board also found that he failed to respond to information requests from the disciplinary counsel and violated his duty to cooperate with the disciplinary proceeding.
The board considers several issues before recommending a sanction, including aggravating circumstances that can increase a penalty and mitigating factors that can lessen it. The board noted that Engel has prior disciplinary offenses, committed multiple rules violations, and didn’t cooperate in the investigative stage of the disciplinary process.
It also found that he didn’t act with a dishonest or selfish motive, eventually made full disclosure to the board and cooperated in the proceedings, provided proof of good character and reputation, and presented proof of a disorder that affected his representation of Shelton.
The panel heard from several witnesses including psychologist Marsha K. Weston, who testified that Engel was depressed and anxious when he first started to see her in August 2016. Weston prescribed medication and said Engel responded well to it and can competently practice law.
Engel testified that he was insufficiently attentive to Shelton’s case and didn’t realize he was suffering from depression and anxiety that was affecting his practice. He admitted he should have been more responsive and that this type of misconduct will not happen again. He said he contracted with the Ohio Lawyers Assistance Program (OLAP) for treatment assistance and hired a new office associate to focus on client communications. He also entered into a mentoring relationship with attorney Jonathan Hollingsworth, the former Ohio State Bar Association president, who has advised Engel.
The disciplinary counsel recommended a two-year suspension with six months stayed. The board adopted the recommendation, stating it was consistent with sanctions imposed on lawyers with similar infractions. It recommended to the Supreme Court that the 18-month stay be conditioned on Engel continuing to receive counseling from Weston or another qualified health care provider; that he adhere to recommendations from his primary care physician, and stay in compliance with his OLAP contract. In addition, the board suggested that once Engel is reinstated to practicing law, he should be placed under two years of monitored probation.
Engel notes the parties and the board stipulated to nearly all the facts as well as the aggravating and mitigating circumstances in the case, except for one. He argues the hearing panel did not “expressly” adopt the position that Engel’s mental disorder contributed to his misconduct or credit him for being sufficiently treated for the disorder. He also maintains the board didn’t consider his participation in OLAP, his attorney mentoring with Hollingsworth, or the changes to his legal practice as mitigating factors.
Engel cites several cases, including the Court’s recent 2017 Ashtabula County Bar Association v. Brown as examples where lawyers similarly situated to him have received fully stayed suspension on certain grounds. Engel noted that he had to part with his initial attorney handling his disciplinary matter after serious disagreements. He objects to the panel’s refusal to allow him to supplement his closing arguments with additional information, including the impact of the Brown case, which was decided after closing arguments were submitted. He maintains the failure to consider the cases he cited along without crediting him for his contributions to the profession by teaching for the Supreme Court’s Judicial College and representing a population that is underserved in Ohio led the board to erroneously suggest a sentence that prevents him from practicing law.
The disciplinary counsel observes that this is the third time Engel has been found to have neglected a client and the second time he has failed to cooperate in a disciplinary matter, and insists that this behavior warrants an actual suspension from practicing law. The disciplinary counsel notes that Engel’s behavior caused a delay in Shelton’s ability to purchase a home and left her to settle her debt on her own.
The disciplinary counsel compares the mental disability claims of one of Engel’s past disciplinary matters with the current case. In Engel’s 2004 case, he didn’t receive mitigation credit for his mental disability because he didn’t present evidence that the depression contributed to his misconduct, the disciplinary counsel explains. The 2004 sanction specified his reinstatement was conditioned on providing a statement from a qualified mental health professional that he was could ethically and competently practice law, which he did provide.
Similarly to 2004, the disciplinary counsel contends in the Shelton matter, Engel presented evidence of a mental health disability, but no evidence that the disorder prevented him from following the professional conduct rules. The disciplinary counsel notes Engel didn’t seek treatment until after he received an official board complaint about his behavior.
The disciplinary counsel maintains that Weston, Engel’s treating psychologist, wouldn’t conclude whether Engel was competent to practice law when he sought treatment, and she could not explain why Engel neglected this client and apparently did not neglect other clients at the same time. Nevertheless, the disciplinary counsel argues the board did give Engel some mitigation credit for the disability.
Absent significant mitigation credit, Engel’s record and failure to cooperate would warrant an indefinite suspension, the disciplinary counsel argues. While the board may not have stated explicitly how it factored his mental health treatment into its finding, the recommended lower sanction of a two-year suspension, rather than an indefinite suspension, indicates Engel was given mitigation credit, the disciplinary counsel maintains.
These informal previews are prepared by the Supreme Court's Office of Public Information to provide the news media and other interested persons with a brief overview of the legal issues and arguments advanced by the parties in upcoming cases scheduled for oral argument. The previews are not part of the case record, and are not considered by the Court during its deliberations.
Date Published: December 12, 2017