ATTORNEYS FOR APPELLANT ATTORNEYS FOR APPELLEE
John D. Papageorge Daniel L. Taylor
Steven C. Shockley J. Kent Minnette
Taft Stettinius & Hollister LLP Taylor, Chadd, Minnette,
Indianapolis, Indiana Schneider & Clutter, P.C.
Crawfordsville, Indiana
Kelley A. Karn
Casey M. Holsapple
Duke Energy Business Services LLC
Plainfield, Indiana
ATTORNEYS FOR AMICUS CURIAE –
INDIANA ENERGY ASSOCIATION
Robert L. Hartley
Maggie L. Smith
Frost Brown Todd LLC
Indianapolis, Indiana
ATTORNEY FOR AMICUS CURIAE –
INDIANA CHAPTER NATIONAL
ASSOCIATION OF WATER
FILED
COMPANIES, INC.
Aug 24 2017, 6:30 am
Nicholas K. Kile
CLERK
Barnes & Thornburg LLP Indiana Supreme Court
Court of Appeals
Indianapolis, Indiana and Tax Court
IN THE
COURT OF APPEALS OF INDIANA
Court of Appeals of Indiana | Opinion 93A02-1704-EX-780 | August 24, 2017 Page 1 of 14
Duke Energy Indiana, LLC, August 24, 2017
Appellant, Court of Appeals Case No.
93A02-1704-EX-780
v. Appeal from the Indiana Utility
Regulatory Commission
Town of Avon, Indiana, The Honorable David E. Ziegner,
Appellee. Presiding Commissioner
The Honorable Aaron A. Schmoll,
Sr., Administrative Law Judge
Cause No.
44804
Najam, Judge.
Statement of the Case
[1] In June of 2016, Duke Energy Indiana, LLC (“Duke”) filed a complaint against
the Town of Avon (“Avon”) with the Indiana Utility Regulatory Commission
(“IURC”). In its complaint, Duke disputed Avon’s authority to order Duke to
remove, at Duke’s own cost, utility poles, power lines, and other equipment
located either on land owned by Avon or in Avon’s rights-of-way. However,
prior to Duke filing its complaint with the IURC, Avon had filed a complaint
for declaratory judgment against Duke in the Hendricks Circuit Court on the
same questions. The IURC dismissed Duke’s complaint out of deference to the
jurisdiction of the Hendricks Circuit Court. Duke appeals that dismissal and
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raises two issues for our review,1 but we consider only the following dispositive
issue: whether Indiana law establishes exclusive jurisdiction in the IURC over
the subject matter of the parties’ complaints. We hold that Indiana law
establishes that exclusive jurisdiction. Accordingly, we reverse the IURC’s
dismissal of Duke’s complaint and remand for further proceedings.
Facts and Procedural History
[2] Duke is an Indiana company that distributes, furnishes, and sells retail electric
service to more than 800,000 Hoosiers. As such, Duke is an “electricity
supplier” and a “public utility” under Indiana law. Appellant’s App. Vol. II. at
7. In 2014, Avon informed Duke that Avon intended to construct road and
trail improvements near the intersection of County Road 625 East and U.S.
Highway 36 in Hendricks County. Avon’s project required Duke to relocate
certain utility poles, power lines, and other equipment (collectively referred to
as the “facilities”) that was owned by Duke but located either on land owned by
Avon or in Avon’s rights-of-way.
[3] On February 26, 2015, the Avon Town Council passed Ordinance No. 2015-03,
enacted as Section 4-9-4-122(E) of the Avon Town Code (“the Ordinance”).
The Ordinance shifted the costs of the relocation expenses associated with
1
The Indiana Energy Association and the Indiana Chapter National Association of Water Companies, Inc.
join Duke’s appeal as amici curiae. We thank the amici for their informative brief.
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Duke’s facilities and required Duke to pay for that relocation.2 A violation of
the Ordinance would result in a fine of $500 per day.
[4] In February of 2016, Duke informed Avon that Duke would not comply with
the Ordinance because, according to Duke, the Ordinance was unreasonable
and contrary to Indiana law. As such, on May 23, Avon filed a complaint for
declaratory and injunctive relief in the Hendricks Circuit Court against Duke.
In its complaint, Avon alleged that Indiana law requires a utility provider that
must relocate facilities to accommodate a municipal improvement to do so
without reimbursement from the municipality. Accordingly, Avon requested
the Hendricks Circuit Court to enter a declaratory judgment that “Indiana law
does not require Avon to reimburse Duke for the relocation costs incurred” by
Duke for Avon’s improvements. Id. at 19. Avon further asked the court to
enjoin Duke from refusing to comply with Avon’s demands.
2
In particular, the Ordinance states as follows:
Relocation of public utilities. If it is necessary for public utilities located on public streets or
in the town’s rights-of-way to be relocated because of a town road project, street project,
sidewalk project, trail project or other project, or any combination thereof, the owner of
the public utility facilities will relocate the facilities at the owner’s expense at a time and
place determined by the town. The town will provide to the owner written notice, at least
60 days prior to the date by which the relocation must be completed, of the new location
of the facilities and the time for completion. If the owner fails to relocate the public
utility facilities as directed by the town, the town will have the right to relocate the public
utility facilities. If the town exercises its right to relocate the facilities, the owner will
reimburse the town for the cost of the relocation within 30 days of the receipt by the
owner of a notice of the cost of relocation. If the owner fails to reimburse the town for
these costs, the town has the right to collect these costs by exercise [of] any available legal
remedy, including but not limited to a money judgment for the costs incurred by the
town.
Avon, Ind., Code § 4-9-4-122(E) (2016).
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[5] Thereafter, on June 24, Duke filed a motion to stay in the Hendricks Circuit
Court and a complaint with the IURC. In its complaint, Duke alleged as
follows:
4. [Duke’s] Argument. Statutory and case law provide that
public utilities shall relocate their utility facilities at their own
expense only if (a) they are located in the public right-of-way and
(b) are in the way of a general road improvement project, e.g., a
general widening or modification of the paved surface of the
roadway for the benefit of the vehicular traveling public and not
for the benefit of an adjoining landowner or another member of
the traveling public, e.g., municipal utility facilities, municipal
trails, or public utilities, etc. Because this case concerns a “multi-
use trail,” it is [Avon’s] responsibility to pay for the relocation of
[Duke’s] facilities . . . .
5. Applicable Statutes and Regulations. The [IURC] has
jurisdiction over this matter pursuant to Ind. Code § 8-1-2-
101(a)(1). The statute provides that the [IURC] shall set a
hearing upon a Complaint by a utility that a municipal ordinance
or determination is unreasonable. The statute further states
that[,] if the [IURC] finds the contested ordinance or
determination to be unreasonable, such ordinance or
determination shall be void. . . .
Id. at 9. Duke thus requested the IURC to find the Ordinance unreasonable
and void and to declare that Duke “is not required under Indiana law to
relocate its facilities for [Avon’s] multi-use trail unless and until [Avon] agrees
to reimburse [Duke] for its costs with such relocation . . . .” Id. at 10.
[6] On August 2, two presiding officers with the IURC “decline[d] to set a
procedural schedule at this time” because “an action involving the same general
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subject matter was filed in Hendricks County prior to being filed with the
[IURC].” Id. at 27. The officers instead ordered Duke to provide a timely
status report to update the IURC on the status of the matter in the Hendricks
Circuit Court.
[7] Meanwhile, the Hendricks Circuit Court set a hearing on Duke’s motion to
stay, but, on August 9, the parties submitted an Agreed Order to the Hendricks
Circuit Court, which the court accepted. According to the Agreed Order:
6. The parties have reached an agreement regarding the
preliminary issues raised by Avon’s request for injunctive relief
and [Duke’s] motion for a stay that provides:
6.1 Avon will tender to the Court within ten days of the
entry of this order the full estimated relocation costs in the
amount of $103,455.97, and the Clerk will hold these
funds until the Court conducts a hearing on Avon’s
complaint . . . and determines whether these funds should
be paid . . . to [Duke] or returned to Avon . . . .
6.2 Avon will execute and deliver to [Duke a] Utility
Relocation Agreement, but Avon reserves its right to
present evidence to the Court and to continue to seek
declaratory relief that the relocation agreement is invalid;
6.3 [Duke] will deliver to Avon the required utility
relocation work plan, Avon will execute it and return a
fully executed copy to [Duke], and [Duke] shall relocate its
utility facilities pursuant to the Work Plan on or before
December 1, 2016;
***
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6.6 On August 2, 2016, the [IURC] declined to
schedule a hearing on [Duke’s] complaint because this
case, which involves the same general subject matter, was
filed by Avon before [Duke] filed its complaint with the
IURC. [Duke] intends to seek an attorneys’ conference
before the IURC to address the IURC August 2, 2016[,]
Order. Following the attorneys’ conference with the
IURC, the parties will provide a report to this Court
concerning any need for a stay of these proceedings. By
entering into this agreement, [Duke] does not waive any
rights to obtain a ruling on the Verified Complaint filed
with the IURC regarding the reasonableness of Avon’s
ordinance. Because of the parties’ agreement, there is no
need for a hearing on Avon’s request for injunctive relief
or [Duke’s] request for a stay.
Id. at 33-34.3
[8] The next day, Duke moved for an attorneys’ conference with the IURC. In that
motion, Duke asserted that, “[b]ecause [Duke] has directly challenged the
reasonableness of an ordinance, this matter comes within the IURC’s
mandatory jurisdiction.” Id. at 28. Avon opposed Duke’s motion and asserted
that “the Hendricks Circuit Court has valid subject matter jurisdiction over this
matter and these issues.” Id. at 37.
[9] On September 30, the IURC presiding officers entered an order in which they
denied Duke’s request for an attorneys’ conference and again instructed Duke
3
Entering into the Agreed Order permitted Avon to receive federal funds for its improvement project.
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to provide timely status reports on the proceedings in the Hendricks Circuit
Court. According to that September 30 Order:
The [O]rdinance is devoid of any fee requirement, and[,] as such,
does not raise questions that would be more appropriately
addressed to the [IURC] given its specific expertise in making
determinations concerning the reasonableness of rates and
charges . . . . Instead, the reasonableness of the [O]rdinance is a
general legal question that may be raised to the trial court . . . .
Id. at 44. Duke appealed the September 30 Order to the full Commission of the
IURC. The full Commission agreed with the September 30 Order and, further,
dismissed Duke’s complaint without prejudice. In particular, the full
Commission stated as follows:
The legality of Avon Town Ordinance 2015-03 is the subject of
the Hendricks County Action, and[,] as such, Commission
involvement in a pending trial court matter would be
inappropriate. Accordingly, we affirm the Presiding Officers’
September 30, 2016[,] Docket Entry. Further, absent an
agreement between Duke and [Avon], subject to the trial court’s
approval, to forego further proceedings related to [Avon’s]
request for declaratory relief and to transfer the matter to the
Commission, it is unnecessary to maintain this Cause on the
Commission’s docket. Accordingly, this Cause is dismissed
without prejudice.
Dismissal Order at 2. This appeal ensued.
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Discussion and Decision
[10] Duke appeals the IURC’s conclusion that it lacks jurisdiction over Duke’s
complaint. “‘To the extent the issue turns on statutory construction, whether
an agency possesses jurisdiction over a matter is a question of law for the
courts.’” Walczak v. Labor Works-Ft. Wayne LLC, 983 N.E.2d 1146, 1152 (Ind.
2013) (quoting Ind. Dep’t of Envtl. Mgmt. v. Twin Eagle LLC, 798 N.E.3d 839, 844
(Ind. 2003)). That is, the issue of “statutory construction . . . on the question of
[an agency’s] jurisdiction . . . lies squarely within the judicial bailiwick.” Id. at
1153. “[W]hen all of the issues presented” in a complaint “fall within the
exclusive jurisdiction of the relevant administrative or regulatory agency,” our
trial courts lack “subject matter jurisdiction over th[e] case.” Austin Lakes Joint
Venture v. Avon Utils., Inc., 648 N.E.2d 641, 646 n.5 (Ind. 1995).
[11] As the Indiana Supreme Court has explained:
[W]hen we construe any statute, our primary goal is to effectuate
legislative intent. Shepherd Props. Co. v. Int’l Union of Painters &
Allied Trades. Dist. Council 91, 972 N.E.2d 845, 852 (Ind. 2012).
We presume the General Assembly intended the statutory
language to be applied logically and consistently with the
statute’s underlying policy and goals, id., and we avoid
construing a statute so as to create an absurd result. St. Vincent
Hosp. & Health Care Ctr. Inc. v. Steele, 766 N.E.2d 699, 704 (Ind.
2002).
Id. Further:
The General Assembly created the Indiana Utility Regulatory
Commission primarily as a fact-finding body with the technical
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expertise to administer the regulatory scheme devised by the
legislature. United Rural Elec. Membership Corp. v. Ind. & Mich.
Elec. Co., 549 N.E.2d 1019 (Ind. 1990); See Ind. Code § 8-1-1-5
(2008). The Commission’s assignment is to insure that public
utilities provide constant, reliable, and efficient service to the
citizens of Indiana. Ind. Bell Tel. Co. v. Ind. Util. Regulatory
Comm’n, 715 N.E.2d 351, 354 n.3 (Ind. 1999). The Commission
can exercise only power conferred upon it by statute. United
Rural Elec. Membership Corp., 549 N.E.2d at 1021.
N. Ind. Pub. Serv. Co. v. U.S. Steel Corp., 907 N.E.2d 1012, 1015 (Ind. 2009).
[12] Indiana Code Section 8-1-2-115 (2017) states as follows with respect to the
obligations of the IURC to enforce the law:
The commission shall inquire into any . . . violation of the statutes
of this state or the ordinances of any city or town by any public
utility doing business therein . . . and shall have the power, and it
shall be its duty, to enforce the provisions of this chapter, as well as all
other laws, relating to public utilities . . . .
(Emphases added.) Section 101(a)(1) of that Chapter states that a municipal
council shall have the power:
To determine by ordinance the provisions, not inconsistent with
this chapter or IC 8-1-11.1, upon which a public utility . . .
occupies the areas along, under, upon, and across the streets,
highways, or other public property within such municipality or
county, and such ordinance or other determination of such
municipality or county executive shall be in force and prima facie
reasonable.
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I.C. § 8-1-2-101(a)(1). However, Section 101(a)(1) continues: “Upon
complaint made by such public utility . . . the commission shall set a hearing, as
provided in sections 54 to 67 of this chapter, and if it shall find such ordinance
or other determination to be unreasonable, such ordinance or other
determination shall be void.” Id.
[13] We hold that Section 101(a)(1) and Section 115 unambiguously establish
exclusive jurisdiction in the IURC to hear Duke’s complaint on the validity of
the Ordinance. Section 115 explicitly says that it “shall be [the IURC’s] duty”
to “enforce . . . all . . . laws[] relating to public utilities.” I.C. § 8-1-2-115.
Section 115 further expressly directs the IURC to “inquire into
any . . . violation” of a local ordinance by a public utility. Id. (emphasis added).
And Section 101 specifically contemplates disputes between towns and utilities
regarding access to rights-of-way or other access to public property by a utility.
I.C. § 8-1-2-101(a)(1). Accordingly, Indiana law directs that the subject matter
of the dispute between Avon and Duke be decided by the IURC.
[14] We acknowledge the IURC’s assessment that, at least at this point in the
proceedings, the subject matter of the parties’ dispute appears to be in the
nature of a “general legal question” rather than one that requires “specific
expertise” to resolve. Appellant’s App. Vol. II at 44. Nonetheless, the
Ordinance directly affects a public utility, and if the IURC did not have
exclusive jurisdiction to consider the operation, effect, and enforceability of
such ordinances then Indiana’s public utilities would be forced to engage in a
multitude of disputes over local ordinances throughout the State with no clear
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guidance either to the utilities or the municipalities. Section 101(a)(1) and
Section 115 place the resolution of all such disputes with the IURC.
[15] Indeed, as amici curiae explain:
There are sound public policy reasons why the General Assembly
has declared the [IURC] to be the exclusive arbiter of
enforceability of ordinances affecting utility services. The
General Assembly has established a uniform system for the
regulation of utilities. The [IURC] has both the fact-finding
expertise and the broader non-local focus necessary to balance
competing interests and determine when a local entity’s
imposition of costs on a public utility exceeds the bounds of
reasonableness.
An examination of Avon’s ordinance illustrates why the [IURC]
must be the entity to determine the reasonableness of that
ordinance. The [O]rdinance shifts onto public utilities all costs to
relocate utility facilities, without considering the broader public
interests of utility customers. It empowers Avon to determine
unilaterally both the facilities to be moved and their new
location, with no constraints on the exercise of that authority and
without any need to (i) consider new impacts on service[] or (ii)
balance costs and benefits or provide procedures for considering
less costly alternatives.
The [O]rdinance contains no provisions to ensure that any new
location Avon designates is legal and feasible under the myriad
of federal and state laws and regulations that public utilities must
follow in siting and constructing their facilities. And it permits
Avon to give only sixty days-notice . . . with no consideration of
factors that may prevent utilities from complying within that
time, such as weather, design constraints, availability of
materials, feasibility, compliance with federal and local law,
acquisition of legal rights, etc.
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The [IURC’s] strong understanding of the public interest and its
demonstrated expertise in administering the regulatory schemes
in which utilities operate are essential to a fair evaluation of local
ordinances that impact utilities. The [IURC] must be the entity
to determine the reasonableness of the Avon ordinance[] and all
other ordinances affecting utility services across this State.
Amici Curiae Br. at 6-7. We agree. Accordingly, we reverse the IURC’s
dismissal of Duke’s complaint.
[16] Duke further asks that we remand with instructions that the IURC “set a
hearing,” Appellant’s Br. at 43, on Duke’s complaint in accordance with
Section 101(a)(1)’s language that, upon complaint, the IURC “shall set a
hearing, as provided in sections 54 to 67 of this chapter.” But Section 61(a) of
that Chapter, to which Section 101(a)(1) refers and which expressly applies to
complaints filed by public utilities, states that “[a]n order . . . may be entered by
the commission without a formal public hearing” or that the IURC “may . . . on
its own motion require a formal public hearing.” I.C. § 8-1-2-61(a) (emphases
added).4 That is, Section 101(a)(1) compels the IURC here to hold a hearing
only as provided in Section 61(a), and, on this record, Section 61(a) leaves the
decision to hold a hearing in the IURC’s discretion. As such, we decline to
instruct the IURC to hold a hearing at this time, and we remand only with
4
Section 61(a) also states that the IURC “shall” hold a formal public hearing “upon a motion filed” by
various entities, but no such motion has been filed at this time. I.C. § 8-1-2-61(a).
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instructions that the IURC proceed in a manner not inconsistent with this
opinion.
[17] Reversed and remanded with instructions.
Kirsch, J., and Brown, J., concur.
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Duke Energy Indiana, LLC v. Town of Avon, Indiana
Combined Opinion