MARSHAL: PLEASE RISE. HEAR YE. HEAR YE. HEAR YE. THE SUPREME COURT OF FLORIDA IS NOW IN SESSION. ALL WHO HAVE CAUSE TO PLEA, DRAW NEAR, GIVE ATTENTION AND YOU SHALL BE HEARD. GOD SAVE THESE UNITED STATES, THIS GREAT STATE OF FLORIDA AND THIS HONORABLE COURT. LADIES AND GENTLEMEN, THE SUPREME COURT OF FLORIDA. PLEASE BE SEATED.
CHIEF JUSTICE: GOOD MORNING, LADIES AND GENTLEMEN, AND WELCOME TO THE FLORIDA SUPREME COURT. THE FIRST CASE ON THIS MORNING'S DOCKET IS ALLIED UNIVERSAL CORPORATION VERSUS BAEZ. THE PARTIES ARE READY. MR. ENGLAND, YOU MAY PROCEED.
MAY IT PLEASE THE COURT. MY NAME IS ARTHUR ENGLAND. I HAVE WITH ME AT COUNSEL TABLE AND ON THE BRIEFS AS WELL, MR. KENNETH HOFFMANN AND MR. DANIEL VAN CLATER. YOUR HONOR, I HAVE RESERVED FIVE MINUTES. I HOPE I WILL BE ABLE TO TAKE THAT. YOUR HONORS, THIS IS ONE OF THOSE OCCASIONS WHERE YOU ARE NOT SETTING AS A PRECEDENT SETTING HIGHEST TRIBUNAL IN THE STATE OF FLORIDA.
IS THIS ALSO ONE OF THOSE CASES WHERE WE MIGHT NOT HAVE JURISDICTION?
NO, SIR.
CAN YOU EXPLAIN TO ME HOW THE ORDER BELOW CONCERNS RATES OR SERVICE. I KNOW WE HAVE INTERPRETED THAT TERM BROADLY, BUT I DON'T THINK THAT WE HAVE INTERPRETED THAT ANY ORDER FROM THE PUBLIC SERVICE COMMISSION IS AUTOMATICALLY APPEALABLE HERE. THERE ARE STILL SOME SUBSET OF ORDERS THAT HAVE NOTHING TO DO WITH RATES OR SERVICE. WHY ISN'T THIS ONE OF THEM?
WELL, YOUR HONOR, THAT IS AN INTERESTING POINT NOT RAISED BY ANYBODY AND OBVIOUSLY YOU ARE CONCERNED ABOUT IT, BUT THE ANSWER IS IT DOES AFFECT RATES. THIS IS DIRECTLY ABOUT A RATE, DISCRIMINATORY RATE, IF YOU WILL, BEING SUBSIDIZED BY THE RATE PAYERS OF TAMPA ELECTRIC COMPANY.
PERHAPS THE ORIGINAL SETTLEMENT WAS ABOUT RATES. PERHAPS THE ORIGINAL ORDER WAS ABOUT RATES, BUT THIS ORDER, WHICH IS SIMPLY DISMISSING YOUR MOTION, HOW DOES THAT PARTICULAR ORDER CONCERN RATES?
BECAUSE IT IS A BAR TO AN INQUIRY WITHIN THE JURISDICTION OF THE PUBLIC SERVICE COMMISSION, TO DETERMINE AN UNLAWFUL RATE, WHICH IS WHAT THEY ARE ALL ABOUT. I DON'T THINK THAT IS, FRANKLY BECAUSE NO ONE RAISED IT, WE DID NOT RESEARCH THE AUTHORITY FOR THESE KINDS OF PROCEEDINGS, BUT I REALLY HAVE NO DOUBT THAT WE ARE HERE PROPERLY, YOUR HONOR.
OKAY.
BUT I WAS GOING TO SAY THAT YOU ARE HERE ON AN INTERESTING FUNCTION, AS AN ERROR-CORRECTING FUNCTION, FIRST LEVEL, TO DECIDE ON THE BASIS OF DE NOVO REVIEW, AND WITHOUT ANY DEFERENCE TO THE LOWER TRIBUNAL, WHETHER THE PUBLIC SERVICE COMMISSION PROPERLY DISMISSED A CAUSE OF ACTION FOR FAILURE TO STATE A CAUSE OF ACTION. NOW, THE LAW GOVERNING THIS IS WELL SETTLED, IT IS STRAIGHTFORWARD, AND I DARESAY VERY FAMILIAR TO THOSE OF YOU WHO SAT ON A DISTRICT COURT OR CIRCUIT COURT BENCH BEFORE. TAKING ALL OF THE ALLEGATIONS AS TRUE, AND GIVING EVERY INFERENCE TO ALLIED, HAVE WE STATED A CAUSE OF ACTION IN THE AMENDED PETITION, TO VACATE A SETTLEMENT ORDER, TO GO BACK TO A COMPLAINT WHICH ALLEGED TWO VIOLATIONS.
WHY ISN'T THIS JUST, REALLY, A HINDSIGHT THAT WE MADE A BAD DEAL, AND NOW THAT WE HAVE REALIZED THAT WE HAVE MADE A BAD DEAL BECAUSE OF INTERVENING CIRCUMSTANCES, WE WANT TO TRY TO GO BACK AND UNDO THE DEAL THAT WE MADE. ISN'T THAT, REALLY, WHAT WE HAVE HERE?
TWO REASONS, YOUR HONOR. WE MADE A DEAL, AND THIS IS THE ALLEGATION OF THE AMENDED COMPLAINT, BASED ON A FRAUD! FRAUD IS ALWAYS A REASON TO OPEN UP A PROCEEDING BEFORE THE PUBLIC SERVICE COMMISSION.
CHIEF JUSTICE: AFTER HOW MANY YEARS?
I AM SORRY?
CHIEF JUSTICE: HOW MANY YEARS BETWEEN THE SETTLEMENT AGREEMENT AND THIS CASE, THE MOTION TO SET ASIDE THE SETTLEMENT?
I THINK THERE WERE THREE, BUT IT DOESN'T MATTER.
CHIEF JUSTICE: IT DOESN'T MATTER IN THE JURISPRUDENCE OF THE STATE, ABOUT HOW LONG THE SETTLEMENT AGREEMENT WAS ENTERED INTO?
NOT AT ALL, YOUR HONOR. WHERE THERE IS FRAUD INVOLVED, LOOK AT THE McCAW CASE THAT THEY RELIED ON, WHICH WAS FOUR YEARS. LOOK AT THE OPPORTUNITY WHEN WE KNEW OF THE MISREPRESENTATION IN THE SIDELKO AFFIDAVIT.
DOES IT MATTER WHETHER IT IS INTRINSIC OR EXTRINSIC FRAUD?
NOT AT ALL. THEY RAISED THAT IN CIVIL PROCEEDINGS. IT HAS NOTHING TO DO WITH THE JURISDICTION. WHAT WE ARE TALKING ABOUT IS THE FLORIDA PUBLIC SERVICE COMMISSION DECLINING TO INQUIRE INTO A FRAUD THAT APPEARS TO HAVE BEEN PERPETRATED BY TECO, ALLIED, I AM SORRY, NOT ALLIED, ODYSSEY. NOT ALLIED.
IS IT LEARNING OF THE FRAUD, OR IS IT DISCOVERING THAT WE CAN'T GET THE BENEFIT OF WHAT WE THOUGHT WAS REALLY A WONDERFUL DEAL, TO GET THESE SAME RATES THAT THIS OTHER COMPANY WAS NOW GOING TO GET, AND THAT YOU WERE PERFECTLY HAPPY, AS LONG AS YOU WOULD BE ABLE TO GET THOSE, YOUR CLIENT GET THOSE.
JUSTICE ANSTEAD, WE NEVER WOULD HAVE BEEN HAPPY WITH AN ILLEGAL RATE.
YOU NEVER WOULD HAVE BEEN HAPPY WITH THE DEAL THAT YOU MADE, IF YOU WERE ABLE TO PROCEED ON THE BASIS THAT YOU THOUGHT YOU HAD AT THE TIME? YOUR COMPANY WOULDN'T HAVE BEEN HAPPY WITH THAT DEAL?
NO. WE THOUGHT WE HAD A LAWFUL RATE, AND WE MIGHT HAVE BEEN HAPPY WITH THAT, BUT WHEN WE ASCERTAINED THAT IT WAS NOT IN COMPLAIN ANSWER WITH THE CISR, WHEN IT IS PER SE SKIMTORY, UNDER 356.03, AND ANYONE, OR PUBLIC COUNSEL ON BEHALF THE RATE PAYERS, JUST AS THEY HAVE DONE IN THIS CASE, CAN INQUIRE INTO THE ILLEGALITY, NO, YOUR HONOR, WE WOULD NOT HAVE BEEN HAPPY BUILDING A $15 MILLION PLANT AND KNOWING LIKE THAT --
THIS IS THE RATE THAT YOUR COMPANY WAS BUYING INTO, WAS IT NOT? THIS VERY, VERY SUPER DEAL.
YES.
AND YOUR COMPANY WAS VERY HAPPY TO GET THAT SUPER DEAL AT THE TIME.
WE DIDN'T KNOW HOW SUPER IT WAS. WE JUST DIDN'T KNOW THAT IT WAS SUPER ILLEGAL, AS WELL AS A SUPER DEAL.
BUT YOU KNEW EXACTLY WHAT IT WAS.
OF COURSE. WE ARE NOT SAYING WE DIDN'T GET --
DID YOU DISCOVER THIS, WHEN WAS THIS DISCOVERY OF THE FRAUD MADE, IN RELATIONSHIP TO YOUR INABILITY TO GET THE PLANT DONE IN THE TWO YEARS? WASN'T THAT PART OF THE SETTLEMENT, THAT YOU HAD TO HAVE THE PLANT DONE IN TWO YEARS?
YES.
SO WHEN DID YOU DISCOVER THIS FRAUD?
AFTER THE EXPIRE OF THE TWO YEARS, YOUR HONOR N A CIVIL COURT IN A CIVIL SUED, WE ASCERTAINED TWO THINGS, NUMBER ONE THAT SIDELKO HAD MISREPRESENTED COMAPPLIANCE WITH THE CISR ORDER, WHICH SHOULD HAVE COMPLIED WITH THE PUBLIC SERVICE COMMISSION, AND THAT THE DEAL THAT HE GOT VIOLATED CHARGES, WHICH WAS A CLEAR VIOLATION OF THE LAW.
WASN'T THAT RELATIONSHIP, WHEN ODYSSEY WENT BEFORE TECO TO GET THIS DEAL, THAT IS WHEN THIS FRAUD WAS MADE, OR ARE YOU ALLEGING THAT THE FRAUD WAS ACTUALLY MADE DURING THE COURSE OF YOUR SETTLEMENT?
TWICE, WHEN THEY WENT TO GET THE DEAL FROM TECO, AND A SECOND TIME, WHEN THEY INTERVENED AND FILED PREFILED TESTIMONY, WHEN WE CHALLENGED THE ODYSSEY RATE IN A PROCEEDING BEFORE THE PUBLIC SERVICE COMMISSION, WHICH IS THE ONE THAT WE WANT TO GET BACK TO. IN THAT PROCEEDING, THEY, AGAIN, REPRESENTED TO SIDELKO, WOULD NEVER HAVE COME, UNLESS HE HAD THE SPECIFIC RATE, AND WE CAN'T TALK ABOUT THE NUMBER BECAUSE THAT IS ALL CONFIDENTIAL, WOULD HAVE A SPECIFIC RATE AND WOULD HAVE GONE TO ANOTHER SERVICE PROVIDER.
THE BASIS FOR THE FRAUD THAT YOU ARE CLAIMING IS IN THIS DEPOSITION THAT WAS TAKEN. IS THAT WHERE --
THAT IS MR. SIDELKO'S RECANTING OF THE STATEMENT, YES, SIR.
EXPLAIN SPECIFICALLY TO ME WHAT YOU SAY WAS FRAUDULENT.
IN HIS AFFIDAVIT, WHEN HE GOT THE RATE FROM TECO, HE SAID, IF ODYSSEY IS UNABLE TO OBTAIN A RATE, AND IT IS A REDACTED NUMBER, PER KILOWATT HOUR OR LESS, ODYSSEY HAD NO MANUFACTURING IN A RELATED SERVICE AREA. HE REPEATED THAT IN PREFILED TESTIMONY, SWORN, AGAIN, WHEN WE FILED A COMPLAINT AND SAID THE RATE THAT ODYSSEY IS GETTING HIS DISCRIMINATORY AND VIOLATES CISR. IT IS NOW IN THE DEPOSITION THAT SAYS HE WOULD HAVE BUILT HIS PLANT, EVEN IF HE DID NOT GET THAT RATE, AND THAT, YOUR HONOR, IS EXACTLY WHY HE DID NOT QUALIFY TO GET IT UNDER THE ORDER OF THE COMMISSION. IT IS CALLED CONSUMER INDUSTRIAL SERVICE AGREEMENT, WHICH MANDATES --
THE LINCHPIN OF THIS ARGUMENT, IS THAT THERE WAS FRAUD, AND THAT THE FRAUD WAS THAT THE PRESIDENT SAID, IN THIS DEPOSITION, EVEN IF I HAD NOT GOTTEN WHAT I GOT, I WOULD HAVE STILL BUILT THE PLANT. THAT IS THE BASIS OF THE FRAUD?
WHICH IS CRITICAL FOR HIS GETTING THE RATE AT ALL, UNDER THE SPECIAL PROGRAM.
CHIEF JUSTICE: IN YOUR CLAIM, IS THAT WHAT INDUCED YOU, YOUR CLIENT, TO ENTER INTO THE SETTLEMENT AGREEMENT FOR THEM TO GET THE SAME RATE? BECAUSE, AGAIN, WE ARE TALKING ABOUT SETTING ASIDE A SETTLEMENT AGREEMENT.
THAT'S CORRECT.
CHIEF JUSTICE: HOW DID THAT REPRESENTATION IN DUES YOU TO ENTER INTO A SETTLEMENT AGREEMENT?
THAT IS NOT THE ISSUE, YOUR HONOR.
CHIEF JUSTICE: AREN'T WE HERE, ISN'T THE COMPLAINT TO SET ASIDE THE SETTLEMENT AGREEMENT?
WHAT YOU HAVE IN FRONT OF YOU IS --
CHIEF JUSTICE: IS IT NOT AN ACTION TO SET ASIDE THE SETTLEMENT AGREEMENT?
YES. TO GO BACK TO THE COMPLAINT, WHICH ALLEGED THE ARGUMENT --
CHIEF JUSTICE: DOESN'T THERE HAVE TO BE FRAUD IN THE INDUCEMENT TO ENTER INTO THE SETTLEMENT AGREEMENT, FOR THERE TO BE A CAUSE OF ACTION?
NO. IF WE SET, IF THE PUBLIC SERVICE COMMISSION AND WE WERE MISLED INTO BELIEVING THAT THERE WAS A VALID CISR ORDER. I AM SORRY. USE THAT TERM. IT IS THE TERM OF WHAT THE COMMISSION CREATED. THE SPECIAL PROGRAM OF DISCOUNTS, IF THAT WAS PROCURED BY FRAUD AND THAT WAS THE PREDICATE FOR EVERYTHING, BUT WE HAD COME INTO THE PUBLIC SERVICE COMMISSION AND SAID, YOUR HONORS, THIS IS A DISCRIMINATORY RATE WHICH YOU NEED TO LOOK AT, AND ON THE BASIS OF EVERYBODY'S UNDERSTANDING THAT IT HAD BEEN A VALID ALLEGATION TO SUPPORT A CLAIM, WE, THEN, WENT FORWARD AND WORKED OUT GETTING THE SAME RATE.
BUT ISN'T THAT WHAT YOU CHALLENGED AND ISN'T THAT WHAT YOU SETTLED?
NO, TWO --
ISN'T THAT WHAT YOU GIVE UP?
NO.
IN OTHER WORDS CONTESTING WHAT WAS GOING ON AT THE TIME, WHEN YOU REACH A SETTLEMENT? THAT IS THAT, IF YOU DON'T REACH A SETTLEMENT --
OF COURSE.
-- YOU, THEN, HAVE THE RIGHT TO GO FORWARD AND TAKE DEPOSITIONS AND HIRE INVESTIGATORS AND SCRUTINIZE THE SITUATION TO THE NTH DEGREE, AND MAYBE IN THOSE PROCEEDINGS COME UP WITH THE SAME SORT OF WHAT YOU CLAIM IS A CONTRADICTION NOW, BUT WHEN YOU SETTLE --
OF COURSE. JUSTICE ANSTEAD, THE SETTLEMENT HAS NEVER BEEN A BAR TO A CLAIM OF FRAUD, TO SET IT ASIDE. THAT IS THE PROPOSITION THAT YOU HAVE HEARD ARGUED THAT MY GOODNESS, WE COULD HAVE FOUND THIS OUT BEFORE, BUT WE DIDN'T, AND THE ISSUE IS NOT DOES FRAUD TRUMP THE SETTLEMENT AGREEMENT?
WHAT ISSUE DID YOU GIVE UP WHEN YOU SETTLED? ANOTHER ABILITY TO CHALLENGE A DISCRIMINATORY RATE, WHICH WAS THE FIRST ALLEGATION WE MADE IN THE COMPLAINT WHEN WE WENT TO THE COMMISSION AND SAID TECO AND THE CISR ORDER AND THE ODYSSEY CSA ARE INVALID! THEY ARE DISCRIMINATORY AND PSC, YOU CAN'T ALLOW IT. WE GAVE THAT UP. YES, WE ENTERED INTO A SETTLEMENT, BUT THERE IS NO DOCTRINE THAT ONCE YOU HAVE SETTLED, NO LONGER, WHEN FRAUD IS DISCOVERED IN THE PROCUREMENT OF THE SETTLEMENT OR THE FACTS LEADING TO IT, SET IT ASIDE. THAT IS NOT --
BUT THE FRAUD THAT YOU ARE CLAIMING HERE IS YOU ARE CLAIMING THAT THEIR FACTS ARE NOT RIGHT. THE REPRESENTATIONS THAT THEY ARE MAKING TO THE PUBLIC SERVICE COMMISSION AND THAT YOU CAN DISPROVE THEM, AND ISN'T THAT, REALLY, IN ESSENCE WHAT YOU WERE CLAIMING BEFORE?
WE WERE CLAIMING DISCRIMINATORY RATE. WE WANT TO PROVE IT. WE WERE MISLED FROM PURSUING THAT.
THAT IS NOW WHAT YOU WANT TO DO AGAIN.
YES. TO PROVE THAT THEY HAD AN INVALID RATE, AND ALL WE ARE ASKING FOR, BY THE WAY, AND THAT IS THE ONLY ISSUE IN FRONT OF YOU, ARE WE ENTITLED TO GO FORWARD WITH PROOF.
LET ME COME BACK TO MY QUESTION.
YES.
BECAUSE I AM HAVING A HARD TIME WITH THIS, THE FUNDAMENTAL PREMISE THAT WHAT COMES OUT OF THE DEPOSITION WAS A FRAUD, BECAUSE WHAT YOU ARE SAYING, AS I WOULD UNDERSTAND IT, IS, IF THIS, IF THE, IN THE DEPOSITION, HE HAD SAID, WELL, NO, I WOULDN'T HAVE BUILT THE PLANT, THEN THERE WOULDN'T HAVE BEEN ANY FRAUD. IS THAT RIGHT?
NO. YOUR HONOR, MAY I DISSUADE YOU OF YOUR CONCERN ABOUT WHETHER IT WAS OR WASN'T FRAUD, BECAUSE YOU CAN'T MAKE THAT INQUIRY, ANY MORE THAN I CAN ALLEGE IT. WHAT WE HAVE ALLEGED IS ALLEGED FRAUD. THE ISSUE IS THE PUBLIC SERVICE COMMISSION SHOULD INQUIRE.
YOU HAVE GOT TO HAVE SOME FACTUAL BASIS, IF YOU ARE GOING TO GO FORWARD, AND THAT IS WHAT I AM TRYING TO UNDERSTAND.
WE DO. THE FACTUAL BASIS TO GO FORWARD IS THE DIRECT CONTRADICTION BY THE PRESIDENT OF ALLIED, I KEEP SAYING ALLIED. OF ODYSSEY. THE PRESIDENT OF ODYSSEY, THAT HE, BUT FOR, IT IS A BUT-FOR PROVISION, BUT FOR THIS PARTICULAR RATE, WE WOULDN'T HAVE BUILT THE PLANT. HE, NOW, SAYS THAT ISN'T, NOT ONLY ISN'T THAT TRUE BUT IT WASN'T IMPORTANT. HE SAID THAT IN HIS STATEMENT.
HE NEVER SAID, THOUGH --
THE QUESTION IS WHETHER THE PUBLIC SERVICE COMMISSION IS GOING TO EXPLORE THAT. IT IS NOT WHETHER IT IS BELIEVABLE.
HE HAS NEVER DISPUTED HIS PRIOR CLAIM THAT THEY NEEDED SOME DISCOUNT, IN ORDER TO BUILD A PLANT.
THAT WASN'T HIS CLAIM. YOUR HONOR, IT WAS VERY SPECIFIC. I QUOTED YOU.
I AM JUST ASKING THE QUESTION.
OH.
HE HAS NEVER DISPUTED HIS PRIOR CLAIM THAT HE NEEDED A DISCOUNT TO BUILD THE PLANT, CORRECT?
YES. A PARTICULAR DISCOUNT. HIS ARGUMENT WAS THAT I NEED THIS RATE THAT IS BEING OFFERED ME BY TECO.
HAS HE EVER SAID I DIDN'T NEED A DISCOUNT AT ALL? HAS HE EVER SAID THAT?
PERHAPS.
THAT IS NOT WHAT MY INTERPRETATION IS OF WHAT HE SAID. HE SAID THEY NEEDED A DISCOUNT FOR A PARTICULAR RATE BUT HE DIDN'T SAY WE COULD DO IT FOR NO DISCOUNT AT ALL.
THE QUESTION IS NOT WHAT HE MEANT. THAT IS THE PUBLIC SERVICE COMMISSION'S JOB. ONE WOULD HAVE THOUGHT THEY WOULD HAVE SEIZED THE OPPORTUNITY TO EXERCISE THEIR JURISDICTION, TO SAY SOMETHING ISN'T RIGHT HERE. LET'S GO FORWARD WITH A HEARING. JUST A HEARING! BUT THAT IS WHAT WE ARE HERE ABOUT.
MR. ENGLAND, YOU DO AGREE THAT THERE IS A MATERIALITY ELEMENT IN CONNECTION WITH THE PRESENTATION OF YOUR LEGAL THEORY, CORRECT?
THAT IS PART OF THE TEST, SURE.
NOW, IF THIS WERE JUST A BUSINESS DISPUTE, AND IN THE UNDERLYING LITIGATION, "X" WAS IN DISPUTE, AND THE PARTIES HAD AN OPPORTUNITY TO EXPLORE THAT OR DO WHATEVER THEY WANTED, AND THEN THE PARTIES ENTERED INTO A SETTLEMENT AGREEMENT, AND LATER, SOMEONE COMES FORTH OR EVIDENCE COMES FORTH THAT SAYS THAT "X" WASN'T REALLY REPRESENTED IN HIS EARLIER DISPUTE, DOES THAT PROVIDE A BASIS TO SET ASIDE THE SETTLEMENT? BECAUSE IF THERE IS NO FRAUD IN CONNECTION WITH THE SETTLEMENT, ITSELF, IT IS WITH REGARD TO, MAYBE, UNDERLYING FACTS OF A DISPUTE. DO YOU BELIEVE FLORIDA LAW SUPPORTS THAT?
YES, YOUR HONOR. TWO DIFFERENT POINTS, THOUGH, ONE, YES, FRAUD, LEADING TO A SETTLEMENT, CAN SET IT ASIDE, BUT MORE IMPORTANTLY, WE ARE REALLY NOT TALK ABOUT TWO PARTIES HERE. WE ARE TALKING ABOUT THE PUBLIC SERVICE COMMISSION, WHICH HAS A PUBLIC RESPONSIBILITY TO THE GENERAL RATE PAYERS OF ITS SERVICE AREA. AND THAT IS WHAT IS INVOLVED IN OUR PROCEEDING, BECAUSE THEY HAVE DECLINED TO STEP UP TO THEIR RESPONSIBILITY AND SAY WE NEED TO KNOW WHETHER THIS IS TRUE, BECAUSE WE ISSUED AN ORDER, AND IF IT IS BEING VIOLATED, WE NEED TO KNOW THAT, BECAUSE OTHER PEOPLE IN THE SYSTEM ARE SUBSIDIZING THAT, AND THAT IS WHAT WE ARE ALL ABOUT, AND MY YELLOW LIGHT IS ON. I APPRECIATE THE QUESTIONS. THIS IS NOT AN EASY CASE, BUT IT COMES DOWN TO AN EASY PROPOSITION. DID WE ALLEGE SUFFICIENT FACTS, NOT PROOF, ALLEGE, TO STATE A CAUSE OF ACTION, AND THAT IS WHAT THIS CASE IS ABOUT. I WOULD, I DIDN'T GET TO STANDING. OBVIOUSLY THAT IS IN THE BRIEFS. THANK YOU, YOUR HONOR. I HOPE I HAVE A LITTLE TIME LEFT.
CHIEF JUSTICE: ARE YOU ALL GOING TO WATCH YOUR TIME? YOU HAVE GOT DIVIDED SEVEN, SEVEN AND SIX.
YES, YOUR HONOR. MAY IT PLEASE THE COURT. JAMES BEASLEY FOR APPELLEE TAMPA ELECTRIC COMPANY. DESPITE THE MULTIFACETED ARGUMENT THAT YOU HAVE HEARD, THE ONLY ISSUE BEFORE THE COURT IS WHETHER THE FLORIDA PUBLIC SERVICE COMMISSION ACTED PROPERLY, WHEN IT DISMISSED ON A SUMMARY BASIS, THE AMENDED PETITION THAT ALLIED HAD FILED. NOW, ALLIED CLAIMS THAT THE COMMISSION DID NOT LOOK AT THAT PETITION IN THE LIGHT MOST FAVORABLE TO ALLIED, IN MAKING THEIR DECISION. HOWEVER, WHAT THE COMMISSION CONCLUDED WAS, THAT EVEN IF GIVEN AN OPPORTUNITY TO HAVE A HEARING AND TO PROVE EVERYTHING THAT THEY ALLEGED, ALLIED HAD NOT STATED A CAUSE OF ACTION FOR THE FRAUD EXCEPTION TO THE DOCTRINE OF ADMINISTRATIVE FINALITY. NOW, THE WAY WE GOT HERE, IS THAT SIX YEARS AGO NEXT MONTH, ALLIED TOOK THEIR FIRST BITE AT THIS APPLE. THEY FILED THEIR COMPLAINT WITH THE COMMISSION, CLAIMING THAT THE ALLIED, TAMPA ELECTRIC NEGOTIATED RATE WAS NOT VALID. SOME YEARS LATER AFTER EXTENSIVE PREHEARING LITIGATION, ALLIED SETTLED WITH TAMPA ELECTRIC, IN PART PROMISING NEVER AGAIN TO CHALLENGE THAT RATE BEFORE THE COMMISSION. THEY GOT GOOD AND VALUABLE CONSIDERATION FOR THAT COMMITMENT. AND THEN SOME THREE YEARS LATER, IT IS NOT SURPRISING THAT THEY WERE ON SHAKEY GROUND.
IS THERE A SPECIAL GLOSS ON THIS, THOUGH, BECAUSE THIS IS THE PUBLIC SERVICE COMMISSION, AND WE HAVE THE PUBLIC'S INTEREST AS AN EXTRA ELEMENT. WE ARE ASKING A LOT OF QUESTIONS THAT MOST OF US ARE COMFORTABLE WITH, WITH REFERENCE TO COURT LITIGATION AND PRIVATE INTERESTS AND SETTLEMENTS THAT MIGHT RESOLVE THAT, BUT IS THERE A SPECIAL GLOSS HERE, WITH REFERENCE TO THE SPECIAL INTERESTS, AND THAT WE HAVE THE SPECTER OF NOW THAT A REPRESENTATION, THAT, NO, THIS IS EXACTLY THE LINE, IN TERMS OF THE RATE, THAT IS GOING TO BE UP OR DOWN, AS TO WHETHER WE, YOU KNOW, WE MOVE FORWARD, AND THAT IT TURNS OUT, NOW THAT, THAT SPECIFIC, YOU KNOW, MAYBE WE WOULD HAVE ACCEPTED HIGHER RATES, AND SO IS THERE A SPECIAL GLOSS HERE THAT THIS COURT HAS A DIFFERENT OBLIGATION, IN TERMS OF REVIEWING THIS, OTHER THAN WE WOULD, PERHAPS, IN PRIVATE LITIGATION, WHEREAS YOU CAN SEE BY SOME OF OUR QUESTIONS, WE MIGHT SAY, NO, YOU HAD THE CHANCE TO EXPLORE WHETHER OR NOT THOSE INJURIES WERE AS BAD AS THEY WERE CLAIMING BEFORE.
JUSTICE ANSTEAD, FROM MY CLIENT'S PERSPECTIVE AND FROM THAT OF THE PUBLIC SERVICE COMMISSION, THERE IS ALWAYS A SPECIAL GLOSS WHEN THE RATE PAYERS ARE AFFECTED. ALLIED HERE, THE ONLY PROBLEM WE HAVE, IS DISABLED THAT BY ENTERING INTO THE SETTLEMENT AGREEMENT. NOTHING PRECLUDES THE COMMISSION FROM ENTERING INTO ANYTHING THAT SERVES THE RATE PAYERS OF THE STATE OF FLORIDA. THERE IS NOTHING IN THE SETTLEMENT AGREEMENT THAT PRECLUES THE COMMISSION FROM PURSUING THOSE ISSUES.
CHIEF JUSTICE: WAS TECO A PARTY TO THE PROCEEDINGS? WHAT LED UP TO THE SETTLEMENT?
WE FILED AGAINST TAMPA, CHALLENGING AGAINST THE ODYSSEY/TAMPA ELECTRIC AGREEMENT. WE WERE A PARTY TO THAT.
CHIEF JUSTICE: FOR EXAMPLE, WHEN YOU NEGOTIATED THE RATE, YOU, ALSO, WOULD HAVE RELIED ON THE AFFIDAVIT OF THE PRESIDENT, THAT BUT FOR GETTING THIS RATE, HE COULDN'T ENTER INTO IT. IF IT HAD BEEN A SITUATION WHERE YOU, NOW, WERE CHALLENGING, SAYING YOU KNOW WHAT? THIS, WE ONLY GAVE THIS DISCOUNTED RATE BECAUSE OF THESE STATEMENTS, WOULD YOU HAVE AN ACTION FOR FRAUD, TO SET ASIDE THAT RATE AND SINCE IT WOULD BE IN YOUR INTEREST TO HAVE A HIGHER RATE? HOW WOULD YOU LOOK AT THAT? IN OTHER WORDS, GOING BACK TO, REALLY, WHAT JUSTICE, SEE, BECAUSE I AM HAVING A PROBLEM WITH HOW THIS INDUCED THEM TO ENTER INTO THE SETTLE PRESIDENT AGREEMENT, BUT I AM SEEING THIS, THAT IF THERE IS AN ACTION AT ALL, IT WOULD BE IN THE UNDERLYING ISSUE OF WHAT INDUCED YOU, TECO, TO ENTER INTO THE ALLEGED DISCRIMINATORY RATE.
ONLY THING THAT INDUCED TAMPA ELECTRIC, WAS ITS CAREFUL ANALYSIS OF A WHOLE MASS OF EVIDENCE SUPPORTING THE CONCLUSION THAT THIS RATE WAS GOOD FOR ALL OF THE RATE PAYERS OF TAMPA ELECTRIC COMPANY, BECAUSE IT WOULD REDUCE THE AVERAGE COST FOR ALL CUSTOMERS TO HAVE THIS CUSTOMER COME INTO THE SERVICE AREA AND TO COVER ALL OF THE VARIABLE COSTS AND MAKE A CONTRIBUTION TO THE FIXED COSTS.
CHIEF JUSTICE: BUT IN ORDER TO GIVE A DISCOUNTED RATE, IT JUST CAN'T BE, BECAUSE THAT WOULD MEAN ANY BUSINESS COMING IN TO GET A DISCOUNTED RATE. YOU CAN'T JUST GIVE A DISCOUNTED RATE BECAUSE THEY ARE GOING TO USE MORE HOURS THAN A RESIDENTIAL CUSTOMER, CAN YOU?
THAT'S CORRECT.
CHIEF JUSTICE: DOESN'T THERE HAVE TO BE AN EXTRA STEP, AND THAT IS WHAT THIS ALLEGATION, THIS AFFIDAVIT WAS ABOUT?
THE AFFIDAVIT WAS PART OF IT, AND WE LOOKED EXTENSIVELY AT WHAT THIS CUSTOMER HAD AS A POTENTIAL IN OTHER AREAS, FROM OTHER UTILITIES, OTHER SERVICE AREAS, OTHER STATES, SO A MASS OF EVIDENCE WAS CONSIDERED BY TAMPA ELECTRIC. WE DON'T WANT TO GIVE MONEY AWAY OR LEAVE MUST NOTY ON THE TABLE, AND CERTAINLY IT WAS IN TAMPA ELECTRIC'S BEST INTERESTS AND THOSE OF ITS CUSTOMERS, TO LOOK AT THIS VERY CAREFULLY AND TO MAKE CERTAIN THAT IT WAS AN AT-RISK CUSTOMER, IN ORDER TO AT OBTAIN OR ACQUIRE THAT LOAD, SO IT WAS AN IMPORTANT THING TO TAMPA ELECTRIC COMPANY AND TO ITS RATE PAYERS AND TO ITS SHAREHOLDERS.
ONE OF THE ALLEGATIONS IS THAT THERE WAS ACTUALLY A CHANGE OF CIRCUMSTANCE HERE IN ADDITION TO FRAUD, AND THAT IS THAT, IN ADDITION TO A REDUCED RATE, THAT THEY GOT SOME OTHER REDUCED OTHER KINDS OF COSTS INVOLVED HERE. ISN'T THAT SOMETHING THAT, REALLY, SHOULD BE BROUGHT TO THE ATTENTION OF THE PUBLIC SERVICE COMMISSION?
THOSE THINGS WERE BROUGHT TO THE ATTENTION OF THE PUBLIC SERVICE COMMISSION, BUT IN THE PROCEEDING --
ONLY IN THIS PROCEEDING, CORRECT?
NO, MA'AM. IN THE PROCEEDING PRIOR TO THIS ONE. ALL OF THESE KINDS OF ALLEGATIONS.
IN WHICH PROCEEDING ARE YOU TALKING ABOUT?
THE ONE THAT ALLIED FILED AGAINST TAMPA ELECTRIC COMPANY SOME NEARLY SIX YEARS AGO, AND IT WAS ULTIMATELY SETTLED BY ALLIED, WITH TAMPA ELECTRIC COMPANY. THE KEY POINT HERE IS THAT ALLIED, EXCUSE ME, ODYSSEY WAS NOT A PARTY TO THE SETTLEMENT AGREEMENT. THE ALLEGED PERPETRATOR OF THE SO-CALLED FRAUD, MISREPRESENTATION, WAS NOT A PARTY TO THAT AGREEMENT, AND THE LAW IN FLORIDA IS CLEAR.
BUT THEY WERE THE INTERVENORS IN THE ORIGINAL ACTION, THE COMPLAINT THAT WAS FILED WITH THE PUBLIC SERVICE COMMISSION?
YES, MA'AM, THAT'S CORRECT, BUT THEY DID NOT PARTICIPATE AT ALL IN THE SETTLE. AT ALL. THEY DIDN'T GIVE ANY CONSIDERATION OR TAKE ANY CONSIDERATION. THERE WAS NOTHING IN THE SETTLEMENT AGREEMENT WITH ALLIED THAT WAS CONTINGENT ON ANYTHING THAT ODYSSEY SAID OR REPRESENTED.
BUT DIDN'T THE SETTLEMENT AGREEMENT, ALSO, INCLUDE SOME LANGUAGE THAT SAID THAT NOT ONLY WAS THE CIR A OR WHATEVER THAT TERM IS, THAT THE ONE WITH ALLIED WAS PRUDENT BUT IT, ALSO, INCLUDED LANGUAGE THAT THE ODYSSEY AGREEMENT WAS PRUDENT, SO HOW WAS ODYSSEY NOT, IT SEEMS TO ME THAT THEY ARE PRETTY MUCH TIED INTO THIS WHOLE SETTLEMENT, ALSO.
THAT WAS A PROVISION THAT TAMPA ELECTRIC AND ALLIED AGREED ON, AS PART OF THE SETTLEMENT AGREEMENT, SO THEY WERE IN FULL SUPPORT OF THE SETTLEMENT RATE BUT ODYSSEY OPPOSED THE AGREEMENT. THEY HAD NOTHING DO WITH IT DIRECTLY. THEY WERE A PARTY TO THE PROCEEDING BUT NOT A PARTY TO THE SETTLEMENT AGREEMENT. THE LAW IN FLORIDA SAYS THAT A MISREPRESENTATION AMOUNTING TO FRAUD, HAS TO BE MADE BY ONE PARTY TO THE SETTLEMENT AGREEMENT TO ANOTHER PARTY TO THE SETTLEMENT AGREEMENT. ODYSSEY WAS TOTALLY NOT INVOLVED IN THE SETTLEMENT AGREEMENT AND OPPOSED IT, AS A MATTER OF RECORD.
CHIEF JUSTICE: THAT IS WHERE JUSTICE LEWIS WAS ASKING ABOUT MATERIALITY, AND NOW YOU ARE ADDING ANOTHER ISSUE, AS I SEE IT, IT IS ALLIED AND TAMPA ELECTRIC THAT ENTERED INTO THE SETTLEMENT.
THAT'S CORRECT. THAT'S CORRECT.
WHERE WOULD YOU BE, FOR EXAMPLE, AS PART OF THIS PROCESS, THAT YOU HAD USED A FALSE AFFIDAVIT, AND SAID THIS IS THE, WHATEVER THE NUMBER, THIS CONFIDENTIAL NUMBER, THAT YOU MADE ONE UP AND PRESENTED IT AND ALLIED HAD SETTLED ON THE BASIS OF THAT. BECAUSE IT WAS WITHIN REFERENCE, THE SETTLEMENT WAS WITH REFERENCE TO SOMETHING ELSE.
THAT'S RIGHT.
THE SAME RATE. I MEAN, IT IS CLEAR THAT THIS FALL APART BECAUSE OF SOME PROBLEM WITH RESTRICTIVE COVENANTS ON BUILDING, BUT IF THAT WERE THE CASE, WOULD THEY HAVE BEEN ABLE TO STATE A CAUSE OF ACTION, A VALID CAUSE OF ACTION, IN THIS PROCEEDING?
IF ODYSSEY HAD ISSUED A FALSE AFFIDAVIT?
OR TAMPA ELECTRIC HAD PRESENTED, IN THIS DISPUTE, A FALSE AFFIDAVIT, NOT THE ONE THAT HAD BEEN ACTUALLY USED BUT ONE THAT HAD BEEN ALTERED.
IF WE HAD SUBMITTED SOMETHING THAT WAS FALSE, IF I UNDERSTAND YOUR QUESTION CORRECTLY, JUSTICE LEWIS, IF WE HAD SUBMITTED SOMETHING THAT WAS FALSE AND KNOWINGLY DONE THAT, WE WOULD BE ON THE CARPET IMMEDIATELY, BEFORE THE COMMISSION.
CHIEF JUSTICE: MR. BEASLEY, YOUR SEVEN MINUTES IS NOW, I THINK, MUCH LONGER. I THOUGHT YOU WERE GOING TO KEEP TRACK OF IT.
THANK YOU. LET ME DEFER TO MS.^STERN FOR THE COMMISSION. I THANK YOU FOR YOUR TIME AND I ASK YOU TO AFFIRM THE COMMISSION'S DECISION.
CHIEF JUSTICE: MR. MARSHAL, HOW MANY MINUTES DID MR. BEASLEY --
MARSHAL: THERE IS TEN AND-A-HALF MINUTES TOTAL LEFT.
CHIEF JUSTICE: IF YOU COULD MAKE SURE THAT MR. CHESTER HAS A BIT OF TIME.
MAY IT PLEASE THE COURT. MY NAME IS MARLENE STERN. I AM APPEARING ON BEHALF THE PUBLIC SERVICE COMMISSION.
CAN I ASK YOU, IS THE PUBLIC SERVICE COMMISSION CONCERNED AT ALL THAT THIS ORIGINAL AFFIDAVIT THAT WAS SUBMITTED BY ODYSSEY, WHERE THEY SAID THAT WE NEEDED THIS PARTICULAR RATE, IN ORDER TO BE ABLE TO BUILD A FACILITY HERE, IS NOT TRUE?
NO. WE DON'T THINK THAT THE FACTS ALLEGED CREATE A PROBLEM THAT WE WOULD BE CONCERNED WITH.
APPARENTLY, ACCORDING TO THE DEPOSITION TESTIMONY, AT LEAST HE SAYS AT LEAST, THAT THEY DIDN'T NEED THAT PARTICULAR RATE. THAT THEY COULD HAVE BUILT A PLANT AT A HIGHER RATE, AND IN FACT, IT WAS TECO THAT INSERTED THE RATE INTO THE AGREEMENT. DOESN'T THAT CAUSE THE COMMISSION SOME CONCERN?
NO. THE TARIFF, THE CISR TARIFF THAT IS REFERRED TO, THE COMMERCIAL INDUSTRIAL SERVICE RIDER TARIFF, WE CALL IT THE TARIFF, PLACES THE BURDEN FOR THE RATE ON TECO BECAUSE TECO IS IN THE BEST POSITION TO FIND OUT THE DETAILS ABOUT IT. WITH RESPECT TO THE AFFIDAVIT, THE COMMISSION WASN'T SO CONCERNED WITH A SPECIFIC RATE AS IT WAS WITH WHETHER THE RATE WAS BELOW THE STANDARD RATE AND ABOVE THE INCREMENTAL COST TO SERVE THE CUSTOMER, SO THERE COULD HAVE BEEN A WHOLE RANGE OF RATES THAT ODYSSEY COULD HAVE ACCEPTED, COULD HAVE WRITTEN IN, THAT WOULD HAVE BEEN APPROPRIATE.
BUT THIS, ONE OF THE ELEMENTS OF GETTING THE SPECIAL REDUCED RATE THAT YOU MAKE CERTAIN ALLEGATIONS THAT YOU WOULD NOT HAVE, IN FACT, BUILT YOUR PLANT IN THIS SERVICE AREA, IF YOU DIDN'T GET THE SPECIFIC RATE.
YOU DON'T HAVE TO STATE A SPECIFIC RATE. IT WOULD HAVE BEEN SUFFICIENT, IF MR. SIDELKO HAD SAID, WE ARE JUST NOT GOING TO LOCATE THE PLANT IN TAMPA, IF WE HAVE TO ACCEPT THE STANDARD RATE. BUT GIVEN HE DID SAY --
EVEN THOUGH HE SAID I WOULDN'T DO IT FOR THIS SPECIFIC RATE AND NOW WE FIND OUT THAT THAT ISN'T TRUE, IT DOESN'T REALLY MATTER.
WHAT WOULD MATTER IS, I WOULD LIKE TO TAKE A STEP BACK AND MR. SIDELKO, IN HIS AFFIDAVIT, SAID HE WOULDN'T LOCATE THE PLANT IN TAMPA IF HE DIDN'T GET A SPECIFIC RATE. IN HIS CIVIL COURT TESTIMONY, HE SAID HIS PLANT COULD BE PROFITABLE AT A HIGHER RATE, AND HE MIGHT HAVE ACCEPTED A HIGHER RATE, AND THAT IS NOT REALLY A PROBLEM, BECAUSE IN THE CISR TARIFF, THE RATE ISN'T TIED TO WHETHER OR NOT THE PERSON CAN TURN A PROFIT OR WHETHER OR NOT A PERSON COULD ACCEPT A HIGHER RATE. IT IS RELATED TO WHETHER THE RATE EXCEEDS THE INCREMENTAL COST TO SERVE.
HOW ABOUT THE ARGUMENT THAT ALLIED SEEMS TO BE, ALSO, PRESENTING, IS THAT, THE MANNER IN WHICH IT IS STRUCTURED, DOES NOT ACCOMMODATE INCREASED FUEL COSTS, AND THAT IT BECOMES ILLEGAL, BECAUSE THERE IS NOT SOME BUILT-IN MECHANISM FOR THESE COSTS. IS THE PUBLIC SERVICE COMMISSION CONCERNED WITH THAT?
WELL, IN THE CISR ORDER, WHICH ALLOWS TECO TO HAVE THIS TARIFF, A RATE CAN BE STRUCTURED, SO THAT IT HAS TWO COMPONENTS, A BASE RATE COMPONENT AND A FUEL COMPONENT, OR IT CAN BE STRUCTURED SO THAT BOTH ARE COMBINED INTO A SINGLE NUMBER, AND IF I --
THAT IS WHAT IT DOES?
THAT'S RIGHT, AND IF I UNDERSTAND ALLIED'S ISSUE, THEY ARE TAKING THE ISSUE THAT ALLIED REFERS TO A SINGLE NUMBER, AND THAT IT DOESN'T ACCOUNT FOR FUEL COSTS, BUT TECO, THE COMMISSION HAD IN THE UNDERLYING CASE, WHERE ALLIED FIRST CLAIMED TECO HAD DISCRIMINATORY RATES, TECO SUBMILTED A COST BENEFIT ANALYSIS, REFERRED TO AS A RIM ANALYSIS IN THE RECORD, AND IT SHOWED THAT ODYSSEY'S RATE, THE RATE THAT ODYSSEY WAS OFFERED, COVERED THE INCREMENTAL COSTS TO SERVE AND THAT WOULD IN INCLUDE THE FUEL COSTS AS WELL. TECO HAD TO MAKE PROJECTIONS OVER TEN YEARS AT THAT POINT AND PROJECTIONS AREN'T ALWAYS ACCURATE. THE OTHER IMPORTANT THING TO UNDERSTAND IS THAT, IF TECO'S PROJECTIONS WERE WRONG AND TECO IS LOSING MONEY ON ODYSSEY'S CONTRACT BECAUSE FUEL HAS INCREASED SUBSTANTIALLY, THE CISR ORDER REQUIRES TECO TO COVER THAT LOSS OUT OF ITS EARNINGS, SO THE LOSS ISN'T PASSED ON TO THE RATE PAYERS.
CHIEF JUSTICE: SO I WANT TO MAKE SURE I UNDERSTAND YOU, THAT TO THE PUBLIC SERVICE COMMISSION, THE ONLY MATERIALITY IS THE PERSON WHO OR THE CORPORATION SEEKING THE RATE, COULD NOT OPERATE, IF THE STANDARD RATE WAS GIVEN, AS LONG AS IT IS, SO THAT IS --
RIGHT.
CHIEF JUSTICE: AND IT IS NOT THE ISSUE THAT THEY NEED A SPECIFIC RATE. IT IS THAT THE INTEREST IS THAT THEY CAN'T BUILD THE PLANT OR WOULD NOT BE ABLE TO GO INTO THAT AREA, UNLESS IT RECEIVED SOME DISCOUNT BELOW THE STANDARD RATE.
RIGHT. RIGHT. THEY EITHER COULDN'T OR THEY WOULDN'T. EITHER ONE IS ACCEPTABLE.
CHIEF JUSTICE: BUT THE OTHER, FROM THE POINT OF VIEW OF THE PUBLIC SERVICE COMMISSION AND THE PUBLIC, THE INTEREST IS THAT IT EXCEEDS THE INCREMENTAL COSTS OF PUTTING THAT CUSTOMER ONLINE.
RIGHT, AND THAT IS WHAT PROTECTS THE OTHER RATE PAYERS. TECO GETS THE, WELL, IF IT EXCEEDS THE INCREMENTAL COSTS TO SERVE, TECO IS PASSING THE COST TO THE CUSTOMER, AND IF PROJECTIONS ARE WRONG OVER A CERTAIN NUMBER OF YEARS, THEN TECO HAS TO COVER, MAKE UP THE DIFFERENCE.
CHIEF JUSTICE: WHEN YOU GO, WHEN THE PUBLIC SERVICE COMMISSION APPROVED THE AGREEMENT BETWEEN ALLIED AND TECO, DID THAT OCCUR? WAS THERE AN APPROVAL OF THE SETTLEMENT AGREEMENT?
BETWEEN TECO AND ALLIED? YES.
CHIEF JUSTICE: THE PUBLIC SERVICE COMMISSION HAS TO APPROVE THAT.
YES.
CHIEF JUSTICE: AND THEN, AGAIN, DO THEY, IN APPROVING IT, DO THEY LOOK AT THE DISCOUNTED RATE? I MEAN, IS THAT SOMETHING THAT IS --
IN THIS CASE, THE, THERE WAS A LOT OF SCRUTINY OF THE SETTLEMENT AGREEMENT, BECAUSE THE SETTLEMENT AGREEMENT CLEARLY SAYS THAT THE PREFILED TESTIMONY OF THE WITNESSES, THE DEPOSITION TESTIMONY, AND RESPONSES OF TECO TO DISCOVERY QUESTIONS, ARE MADE PART OF AN EVIDENTIARY RECORD, SO THE SETTLEMENT AGREEMENT, ITSELF, CREATES AN EVIDENTIARY RECORD, WHICH IS UNUSUAL FOR SETTLEMENT AGREEMENTS, AND THE COMMISSION HAD THE OPPORTUNITY TO REVIEW THAT INFORMATION.
CHIEF JUSTICE: FOUR MINUTES. JUSTICE WELLS IS REMINDING ME THAT YOU HAVE NOW USED ALL BUT FOUR OF THE MINUTES.
OKAY. THANK YOU VERY MUCH.
CHIEF JUSTICE: ONE DAY WE ARE GOING TO GET A TIME KEEPER THAT WILL MAKE THAT EASIER. TECO CYSTER.
MAY IT PLEASE THE COURT. I AM DAVID CHESTER, APPEARING ON BEHALF OF APPELLEE ODYSSEY MANUFACTURING COMPANY, AND IF I MAY, I WOULD LIKE TO MAKE TWO POINTS, THAT ARE GLOBEALLY DISPOSITIVE OF ALL OF THE ISSUES AT BAR. FIRST, EACH AND EVERY REQUEST FOR RELIEF IN THE AMEND COMPLAINT BEFORE, AS CORRECTLY NOTED BY YOUR HONORS, WAS PREDICATED, FOUNDED, BASED ON A CLAIM THAT THE APPELLANTS HAD BEEN DEFRAUDED INTO ENTERING THE SETTLEMENT AGREEMENT BY ODYSSEY. AND SINCE EVERYTHING FLOWS FROM THAT, THE APPELLANTS PLACED THEMSELVES IN A POSITION WHERE, IF THEY DIDN'T STATE A CAUSE OF ACTION FOR FRAUD, ACTIONABLE FRAUD, ALL OF THEIR CLAIMS WERE INVALID, AND, BECAUSE THEY HAD FAILED TO STATE THEM, AND IN THIS MATTER, THEY FAILED TO ALLEGE EVEN THE ESSENTIAL ELEMENTS OF A CAUSE OF ACTION OF FRAUD, WHICH, AS YOU ARE ALL AWARE, DEFEATS ANY SUCH CLAIM. THEY FAIL TO ALLEGE, FOR EXAMPLE, THE BASIC HORNBECK ELEMENT ACKNOWLEDGED BY THE COURTS OF THIS STATE THAT, MR. SIDELKO MADE THE STATEMENTS HE MADE, WITH THE INTENT THAT APPELLANTS RELY ON THEM WHEN ENTERING THE SETTLEMENT AGREEMENT! THEY FAILED TO ALLEGE IT AND THEY CAN'T ALLEGE IT. BUT BY THEIR OWN ADMISSION, THAT ALONE, IS DISPOSITIVE. THEY FAILED TO STATE A CAUSE OF ACTION FOR FRAUD, AND THEREFORE EVERY CLAIM, BEING DEPENDENT UPON THAT, FALLS BY THE WAYSIDE, AND THE ORDER SHOULD BE AFFIRMED. NOW, THE SECOND FATAL OMISSION BY APPELLANTS WAS THEIR FAILURE IN THEIR INITIAL BRIEF, TO ASCRIBE ERROR TO THE PSC'S SPECIFIC AND EXPLICIT CONCLUSION THAT THE LAW GOVERNING SETTLEMENTS MANDATED DISMISSAL OF THE AMENDED PETITION. NOW, HAVING FAILED TO RAISE THIS, WHEN THE PSC SAID THIS ALONE, THIS IS AN INDEPENDENT BASIS TO DISMISS THE COMPLAINT, FAILING TO RAISE THIS ON APPEAL, IS A LEGALLY CONSIDERED A CONCESSION THAT THIS DETERMINATION WAS CORRECT. HAVING CONCEDED IT, HAVING ABANDONED IT, APPELLANTS ARE ENTITLED TO NO RELIEF. THEY CANNOT, THE ORDER MUST BE AFFIRMED.
CHIEF JUSTICE: THANK YOU VERY MUCH.
CHIEF JUSTICE: REBUTTAL.
YOUR HONOR, THIS PROVES THE ADVANTAGE OF HAVING COUNSEL WHO TRIED THE CASE AT THE TABLE WITH ME. I HAVE THE ANSWER TO YOUR QUESTION, JUSTICE CANTERO. THE VERY FIRST QUESTION. YES, THIS COURT HAS PREVIOUSLY ACCEPTED JURISDICTION FROM PSC DISMISSALS, IN THIS CASE A TERRITORIAL SERVICE AGREEMENT. IN THE CASE OF AMERISTEL JACKSONVILLE ELECTRIC AUTHORITY. THERE IS JURISDICTION.
CHANGE YOU -- THANK YOU.
NOW, LET ME ADDRESS THE INDIVIDUAL QUESTIONS AND ANSWER THAT IS I MADE, BECAUSE I THINK I CAN DO THIS VERY SUCCINCTLY. JUSTICE LEWIS, IN RESPONSE TO A QUESTION, YOU WERE TOLD BY TECO, IF IT HAD SUBMITTED A FALSE AFFIDAVIT TO THE COMMISSION, IT WOULD BE ON THE CARPET BEFORE THE PUBLIC SERVICE COMMISSION. WE ARE TALKING ABOUT A FALSE AFFIDAVIT THAT WAS SUBMITTED TO TECO, IN WHICH THEY WERE A PARTY TO ENTERING INTO AN AGREEMENT AS A RESULT OF. WHY AREN'T THEY ON THE CARPET? BETTER STILL, WHY ISN'T THE PUBLIC SERVICE COMMISSION PUTTING THEM ON THE CARPET? JUSTICE QUINCE. THE INITIAL ALLIED COMPLAINT DID NOT EXPLORE THE ISSUE OF AN EXEMPTION FROM FUEL ADJUSTMENT. NOBODY KNEW THAT THEY HAD DONE THAT. IT WAS, I THINK, A SLIP OF THE TONGUE FOR COUNSEL TO SAY THAT WAS IN THE INITIAL PROCEEDING. THIS IS NEW. THIS IS A CHANGE OF CIRCUMSTANCES.
THAT SEEMS TO BE COVERED, DOES IT NOT, THROUGH THE RESPONSE THAT IT CAN BE DONE, EITHER WITH A BREAK OUT OR AS A CONSOLIDATED LUMP SUM AREA? IS THAT INCORRECT? THAT IS THE RESPONSE WE RECEIVED.
THAT IS THE RESPONSE, BUT THAT IS NOT THE CISR ORDER. WHAT YOU HEARD COUNSEL FOR THE PUBLIC COMMISSION SAY, IS AN INTERESTING NEW INTERPRETATION OF AN ORDER THEY ENTERED, WHICH IS ATTACHED TO OUR APPENDIX AS APPENDIX THREE, WHICH IS VERY SPECIFIC AND DOESN'T SAY WHAT YOU SAID. WHAT IT SAYS WAS THE NEGOTIATED DISCOUNT, AND I QUOTE, WILL ONLY APPLY TO BASE ENERGY AND/OR BASE DEMAND CHARGES UNQUOTE. YOU CAN'T READ THAT AS SAYING YOU CAN SLOP OVER A COMBINED ORDER OF FUEL ADJUSTMENT. WHAT THEY SAY THEN, WHAT THEY SAY NOW, IS BE EXPLORING NOT EXCUSING. COUNSEL FOR TECO SAID THEY DID A CAREFUL, HIS QUOTE, CAREFUL ANALYSIS OF THE ODYSSEY RATE. BUT IT TURNS OUT THAT THEY DIDN'T PROVIDE AN ACCURATE RATE. WHY ISN'T THE PUBLIC SERVICE COMMISSION SAYING WE WANT TO DO A CAREFUL ANALYSIS, BECAUSE YOURS AS CAREFUL AS IT MIGHT HAVE BEEN, TURNED OUT TO BE INACCURATE AND VIOLATION OF THE ORDER AND DISCRIMINATORY.
DO YOU HAVE TO ALLEGE THAT YOU RELIED ON THIS RATE TO YOUR DETRIMENT?
WE DID ALLEGE AND WE DID. YES.
OKAY. WHY IS IT TO YOUR DETRIMENT, SINCE YOU RECEIVED THE BENEFIT OF A RATE THAT WAS LOWER THAN THE RATE THAT THEY WOULD HAVE ACCEPTED?
BECAUSE THAT GOES TO THE POINT MADE BY LAST COUNSEL. HE SAYS, WE HAVE TO PROVE FRAUD AND WE DIDN'T PROVE THE ELEMENTS OF FRAUD IN ENTERING INTO THE SETTLEMENT AGREEMENT. THAT IS NOT WHAT THIS CASE IS ABOUT. THIS IS, WE HAVE TO DEMONSTRATE THE FAILURE TO STATE A CAUSE OF ACTION TO INQUIRE BY THE PUBLIC SERVICE COMMISSION, INTO A DISCRIMINATORY RATE! WE DON'T HAVE TO PROVE FRAUD TO GET THE SETTLEMENT SET ASIDE. WE GAVE UP THE OPPORTUNITY TO PURSUE A COMPLAINT FOR DISCRIMINATION, ON THE BASIS OF REPRESENTATIONS WHICH WERE INACCURATE. CALL THEM FRAUD. CALL THEM MISREPRESENTATIONS. THEY WERE FALSE. AND THAT IS WHAT WE ARE GOING BACK TO SAY, AND, AGAIN, WHY THE PUBLIC SERVICE COMMISSION SHOULD BE INTERESTED IN THIS.
CHIEF JUSTICE: MR. ENGLAND, WITH OUR HELP, YOU HAVE USED UP ALL OF YOUR TIME.
I WILL JUST SAY, YOUR HONOR, THAT ALL WE ARE ASKING FOR, IS THE OPPORTUNITY TO PROVE THE ALLEGATIONS OF A COMPLAINT. THE ISSUE IS WHETHER WE HAVE ALLEGED A CAUSE OF ACTION FOR THE PUBLIC SERVICE COMMISSION TO GET INVOLVED. WE BELIEVE WE HAVE. WE HOPE YOU WILL AGREE. WE ASK THAT YOU SEND IT BACK FOR A HEARING. THANK YOU VERY MUCH.
CHIEF JUSTICE: THANK YOU VERY MUCH.