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SWVA, Inc. v. Huntington Sanitary Board

Supreme Court of West Virginia

November 14, 2017

SWVA, Inc., Petitioner below, Petitioner
v.
Huntington Sanitary Board and City Council of the City of Huntington, Respondents below, Respondents

         Cabell County 16-C-807

          MEMORANDUM DECISION

         Petitioner SWVA, Inc. (SWVA), an industrial customer of Respondent Huntington Sanitary Board (Sanitary Board), objected to the process by which the Sanitary Board sought a rate increase in December 2016. Just prior to approval of the ordinance implementing the rate increase by Respondent City Council of the City of Huntington (City Council) in December 2016, SWVA sought a writ of mandamus and injunctive relief from the Circuit Court of Cabell County claiming that the Sanitary Board did not comply with statutory notice requirements. The circuit court denied the relief sought on the grounds that SWVA has an administrative remedy with the Public Service Commission (PSC) for challenging the Sanitary Board's alleged noncompliance.[1]

         Because this case does not present a new or significant issue of law, and we find no prejudicial error, we find that this case satisfies the "limited circumstances" requirements under Rule 21(d) of the West Virginia Rules of Appellate Procedure, and a memorandum decision under that rule is, accordingly, appropriate.

         I. Factual and Procedural Background

         The operative facts in this case are undisputed by the parties and involve a series of meetings conducted by the Sanitary Board and the City Council in December 2016. First, the Sanitary Board met to consider proposed rate increases to fund fifteen itemized projects in the total amount of $75 million. During this meeting on December 5, 2016, discussion turned to a new statutory provision requiring the Sanitary Board to provide prior public notice of construction projects that are not in the ordinary course of business. Concerns raised included whether the ordinance implementing the rate increase could be presented for approval by City Council prior to new City Council members taking office at the beginning of 2017. Ultimately, the Sanitary Board adjourned without taking action; a second meeting was scheduled for December 7, 2016.

         When the Sanitary Board convened on December 7, 2016, it considered "An Ordinance Established and Fixing Rates, Fees and Charges of the Municipal Sewer System of Huntington, West Virginia" (Ordinance). The Ordinance proposed a three-step increase in rates charged by the Sanitary Board in order to fund $7.5 million in construction projects (reduced from the $75 million in projects proposed in the prior meeting). The Sanitary Board approved the Ordinance for consideration by City Council.

         After a first reading, the City Council referred the Ordinance to its Finance Committee. During a meeting conducted on December 14, 2016, detailed presentations regarding the rate increases and the nine (reduced from fifteen) construction projects to be funded were made. During the public comment period of the meeting, SWVA representatives John O'Connor and Elizabeth Grille presented opposition to the proposal. By unanimous vote, the Finance Committee sent the Ordinance back to City Council with a positive recommendation.

         On December 15 and 22, 2016, the Sanitary Board and City Council caused to be published in the Herald Dispatch newspaper a notice that the Council intended to take up consideration of the proposed Ordinance. The notice included the full text of the proposed Ordinance and stated that the hearing would be held on December 27, 2016, at 7:30, if interested parties wanted the opportunity to address the matter. A second notice was published on December 16 and 23, 2016, again providing the date and time of the hearing, and also informing the public that a copy of the Ordinance could be obtained from the Huntington City Clerk's office.

         SWVA contends that it "was concerned about the effect the proposed rates increases would have on its operations, " but was unable "to obtain, never mind digest, specifics about the Ordinance within the compressed timeframe." For that reason, on December 27, 2016 - the same day as the hearing - SWVA filed a complaint and petition for writ of mandamus and injunctive relief against the Sanitary Board and City Council. As relief, SWVA sought (1) a declaration that the nine proposed projects were not in the ordinary course of business and, thus, the Sanitary Board and the City Council were required to give public notice compliant with West Virginia Code § 24-2-11(1) (2015)[2]; (2) a mandate that the Sanitary Board and City Council comply with the notice requirements set forth in that section; and (3) an order preventing a vote on the proposed Ordinance until the notice requirements were met. SWVA filed a motion for a preliminary injunction and a temporary restraining order seeking to compel or enjoin noncompliance with the notice requirements, prohibit further consideration of the Ordinance, and to annul any decision made relating to the Ordinance if made in violation of West Virginia Code § 24-2-11(1).

         That evening, the City Council convened its hearing to consider the proposed Ordinance. After debate and public comment, the City Council approved the Ordinance by a 7-3 vote. The next day, a hearing on SWVA's motions was noticed for January 10, 2017. At that hearing before the circuit court, the Sanitary Board argued that the majority of the injunctive relief requested by SWVA was now moot. Further, the Sanitary Board argued that SWVA was not entitled to any of the remaining requested relief because (1) the improvements approved by the City Council in the Ordinance were in the "ordinary course of business" for which no notice is required under West Virginia Code § 24-2-11(1); and (2) SWVA had not exhausted its administrative remedies available through the PSC.

         Following the hearing, the circuit court denied SWVA's motions, and dismissed its complaint with prejudice. In doing so, the circuit court found that the improvements adopted in the Ordinance were in the "ordinary course of business" and, therefore, did not require notice under W.Va. Code § 24-2-11(1). The circuit court also determined that the statutes governing the PSC provided an adequate remedy at law, and that SWVA was required to exhaust that specific administrative remedy. Specifically, the circuit court referenced West Virginia Code §§ 24-2-1(b)(6) and (7) (2015) as providing an adequate remedy for SWVA, because those sections grant the PSC jurisdiction "over large municipal utilities, such as [the Sanitary Board], with regard to the investigation and resolution of disputes involving their 'rates, fees and charges, ' and . . . provides that customers of those large municipal utilities may bring complaints before the commission regarding those rates [sic] fees and charges."

         SWVA appeals to this Court and argues that the circuit court erroneously characterized its challenge to the Ordinance as a complaint regarding the rates, fees and charges raised in the Ordinance when, in fact, it was challenging the Sanitary Board's and City Council's failure to comply with the notice requirements of West Virginia Code § 24-2-11(1). As a result of that mischaracterization, SWVA argues that the circuit court erroneously concluded it had a remedy under West Virginia Code § 24-2-1(b)(6) and (7). SWVA further argues that the circuit court erred in determining that the projects considered in the proposed Ordinance were "in the ordinary course of business" such that the notice requirements under § 24-2-11(1) were inapplicable.

         II. Standard of Review

         As we have established, "[a] de novo standard of review applies to a circuit court's decision to grant or deny a writ of mandamus."[3] We are likewise governed by a de novo standard of review in determining the scope of the PSC's statutorily granted jurisdiction: "'[w]here the issue on an appeal from the circuit court is clearly a question of law or involving an interpretation of a statute, we apply a de novo standard of review.' Syl. Pt. 1, Chrystal R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415 (1995)"[4] With these standards in mind, we turn to the parties' arguments.

         III. ...


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