III. THE LEGAL THEORIES AND PRINCIPLES OUTLINED IN THE REHEARING APPLICATION DO NOT PREVENT THE COMMISSION FROM ASSESSING A PENALTY, AND THE DECISION WILL BE MODIFIED TO MAKE THIS CLEAR
A. Introduction: The Commission is the Fact-Finder.
In addition to asserting that the Decision failed to appreciate the significance of AT&T's evidence, the rehearing application also claims that the Decision incorrectly applied certain legal principles. According to AT&T, these principles require the Commission to find in AT&T's favor. For example, AT&T claims that the rules of evidence used in court proceedings require the testimony of UCAN's witness Murray to be stricken from the record. Because the rehearing application further claims that "there is no other evidence in the record to support UCAN's claimed violations of [section] 2883[,]" AT&T contends that we must find that the record does not support UCAN's complaint. (Cf., Rehg. App. at p. 6.) By further way of example, AT&T claims that the statutes of limitation governing civil court proceedings prevent us from assessing a penalty in this case. (Rehg. App. at pp. 35-36.)
These claims will be discussed individually, below. However, when considered together, the rehearing application's legal claims show that AT&T fails to understand our role as the decisionmaker and fact-finder in this dispute. In fact, the rehearing application contends, at pages 10-11, that this Commission is legally precluded from exercising judgment in reviewing the record, and in determining what analytic methods it will use to resolve this case. Similarly, the rehearing application asserts that we "cannot ... reject the testimony of AT&T's network engineers supported by written documentation of its practices over a decade." (Rehg. App. at p. 41.)
The law does not contain these limitations on the Public Utilities Commission's authority. In this case, we, and the Presiding Officer, did what the law does require. We weighed the evidence and the differing contentions of the parties. Then we made factual findings and reached legal conclusions. All of this was properly explained. The Decision explicitly describes the analytic framework it used to evaluate the issues presented; and the Decision makes it clear how the evidence and the legal arguments of the parties were considered in reaching its conclusions. (E.g., Decision at pp. 5 (issues presented), 6 (relationship of numbering concerns to section 2883), 12 & 15 (evidence on telephone connection), 18 (evidence on numbering concerns).)
By explaining its approach and relying on the record, the Decision followed a legal and proper method to reach the ultimate conclusion that AT&T should be penalized. In Modifying D.07-07-013 and Denying Rehearing [D.08-04-043] (2007) __ Cal.P.U.C.3d __, we specifically rejected the theory that claims relying on only one party's view of the evidence, asserting that the law required the evidence to be interpreted in a certain way, or contending that the law barred the Commission from making findings adverse to one party can establish that a decision in a complaint case is in error. That decision explained, at page 4 (footnote omitted), that the Commission is the fact-finder in a complaint case. As a result, we are:
charged with the responsibility to undertake a "reasoned analysis" and to explain "the principles [we] relied upon...." (Pacific Tel. & Tel. Co. v. Public Utilities Com. (1965) 62 Cal.2d 634, 648[;] Greyhound Lines v. Public Utilities Com. (1967) 65 Cal.2d 811, 813.) When we properly explain the basis of our holdings-and those holdings are supported by the record-there is "a strong presumption in the correctness of the findings and conclusions of the [C]ommission...." (Pacific Tel. & Tel. Co. v. Public Utilities Com., supra, at p. 648.)
Similarly, claims challenging the method of analysis we have chosen-or determinations we have made about the weight of the evidence-fail to demonstrate error. This is especially true of allegations that rely on provisions of the Evidence Code, or the Code of Civil Procedure, which govern trials in the civil courts. Section 1701, subdivision (a) clearly states that our proceedings are to be conducted according to the rules set forth in our Rules of Practice and Procedure and in the Public Utilities Code. The statute further provides:
No informality in any ... proceeding or in the manner of taking testimony shall invalidate any order, decision or rule made, approved or confirmed by the [C]ommission.
Thus, as a general rule, claims that the Decision must make findings favorable to AT&T because it is precluded from considering certain evidence, or must analyze the record in the particular way described in evidentiary principles advanced by AT&T, do not demonstrate that the Decision is in error. The law requires, instead, that the Commission undertake a reasoned analysis, explain why it chose the principles it did rely upon, and base its decision upon the record.24 As discussed below in detail, the Commission did so here, and claims asserting that the Commission should have used different methods to analyze the issues in this case, or viewed the record in a light more favorable to AT&T, do not demonstrate error.
B. The Decision Properly Required AT&T to Prove Its Claim that Numbering Concerns Required It to Adopt a Policy of Limiting and Not Providing Warm Line Service.
As discussed above, AT&T replied to UCAN's allegation that its warm line policies were illegal by claiming that the statute allowed it to limit warm line service in response to a shortage of telephone numbers. AT&T took the position that the law required the Commission to deny UCAN's complaint unless UCAN made an affirmative showing, based on a preponderance of the evidence, that AT&T's existing technology and facilities allowed it to provide warm line service indefinitely rather than terminating service after approximately 180 days. (AT&T's Opening Brief at p. 6.) AT&T asserted that it "must prevail" if its evidence "cast[] doubt" on UCAN's position. (Ibid.) On the other hand, UCAN asserted that, under normal Commission practice, once it had shown that AT&T was not complying with section 2883 the burden of proof shifted to AT&T to answer UCAN's contentions and show that its conduct was, in fact, permitted by the statute.25 (UCAN's Opening Brief at p. 11.)
We determined to analyze the questions presented in this case by applying a two-part analysis. In the first part of the analysis, the Decision considered section 2883's basic requirement-that warm line service must be provided. (Decision at p. 6.) The Decision then noted that the statute had not created a completely open-ended requirement. Warm line service was to be provided "to the extent permitted by existing technology or facilities," and it was not to be provided if "doing so would preclude providing service to subscribers" of billed telephone service. (Pub. Util. Code, § 2883, subds. (a), (e).) The Decision stated that we read these provisions together to create "an `existing technology and facilities' exception" to the general rule that warm line service must be provided. (Decision at p. 6.)
The Decision then addressed AT&T's contention that, under this "existing technology and facilities exception," numbering concerns allowed it to implement its current warm line policy as an affirmative defense. We stated AT&T would be responsible for proving this defense, i.e., for demonstrating that it was "relieve[d] of liability" because facilities and technology did not exist to provide warm line service as the statute would otherwise require (or that doing so would preclude providing service to other subscribers). (Decision at p. 7.) The Decision explained that we chose to adopt this approach for two reasons. First, after considering principles of evidence that require parties to prove those facts that were essential to the positions they advanced, we determined it was proper to make AT&T responsible for proving the facts relating to claims it advanced regarding numbering shortages. Second, we held that it was "especially appropriate" for AT&T to prove these points as a defense because "most of the information necessary to make such a showing is uniquely in AT&T's possession." (Decision at p. 7.) In this connection, it is worth noting that AT&T's preferred approach to analyzing the record would have placed UCAN in the position of having to prove a negative-that no impediment prevented AT&T from providing warm line service.
The rehearing application contends this approach was error. First, the rehearing application claims that the Decision is incorrect to read section 2883 as containing a general rule and an exception. AT&T asserts that the Decision improperly reads the qualifying phrase "to the extent permitted by existing technology and facilities" in section 2883, subdivision (a), to be a "provision that `relieves AT&T of liability'[.]" Instead, AT&T contends that this language "defines the scope of liability[.]" (Rehg. App. at p. 3 (original emphasis).)
This claim does not accurately describe how the Decision interprets the statute. We held that two parts of the statute, subdivisions (a) and (e), together described what we called an "`existing technology and facilities' exception" to the general requirement that warm line service must be provided. (Decision at p. 6.) The language of subdivision (e) establishes that it was designed to create an exception from the general rule. Subdivision (e) is a stand-alone provision at the end of the statute that states:
Nothing in this section shall require a local telephone corporation to provide "911" access pursuant to this section if doing so would preclude providing service to subscribers of residential telephone service.
We found that this exception was "essentially" repeated in the "existing technology and facilities" language in subdivision (a), and therefore determined to consider the question of whether a carrier was precluded from providing warm line service as a single issue. (Decision at p. 6.) The rehearing application's claim of error is based only on the contention that no exception appears in subdivision (a), and does not take into account that our approach relies on subdivision (e) as well. The rehearing application's discussion of City of Brentwood v. Central Valley Regional Water Control Bd. (2004) 123 Cal.App.4th 714 is misplaced for this same reason. The rehearing application contrasts the language of section 2883, subdivision (a), with the language of the statute at issue in that case but does not take subdivision (e) into account.
Similarly, the rehearing application fails to demonstrate error when it asserts that the "descriptive nature test" set forth in City of Brentwood v. Central Valley Regional Water Control Bd., supra, at pages 725-726 prevents us from determining that section 2883 contains a general rule and an exception. (Rehg. App. at p. 4.) This test states (internal quotation marks and citations omitted):
Whether an exception to liability is an element of an offence or an affirmative defense depends on whether the exception is so incorporated with, and becomes a part of the enactment as to constitute part of the definition of the offence.
While the rehearing application seeks to apply this test to section 2883, it does not take into account the language in subdivision (e). The separate provisions of subdivision (e) are not "so incorporated" with subdivision (a)'s requirement to provide warm line service that it has become a part of that requirement.
In addition, the rehearing application's claims fail to demonstrate error for general reasons. The rehearing application does not account for the fact that determining what falls within the scope of liability in section 2883 and what is an exception is a question of statutory interpretation. (City of Brentwood v. Central Valley Regional Water Control Bd., supra, at pp. 722-723.) The conclusion that 2883 subdivisions (a) and (e) contain an exception to the otherwise applicable warm line requirement based on limitations in technology and facilities was based on a reasonable (and complete) reading of the statute that effectuates its overall purpose, and is, as a result, legally proper. Further, the rehearing application gives no support for the claim that we are legally bound to apply technical rules, "the genesis" of which is criminal law, in this case. (Cf., City of Brentwood v. Central Valley Regional Water Control Bd., supra, at p. 726.) We resolved this case by analyzing the evidence in accordance with straightforward principles developed using the Evidence Code as guidance, and the Decision clearly explained its approach. The law does not require us, instead, to follow the "technical rules" set out in City of Brentwood v. Central Valley Regional Water Control Bd., supra. (Pub. Util. Code, § 1701.)
Finally, as the Decision explains, the technical rules of evidence are not as stringent as the rehearing application claims. Those rules specifically allow a fact-finder to consider a variety of factors "concerning the appropriate allocation of the burden of proof...." (Decision at pp. 37-38.) Rules of evidence permit a fact-finder to "take account of numerous factors in determining whether it is appropriate to shift the burden of proof.... [T]he truth is that there is not and cannot be any one general solvent for all cases. It is merely a question of policy and fairness based on experience in the different situations." (Amaral v. Cintas Corp. No. 2 (2008) 163 Cal. App. 4th 1157, 1190-1191.)26
The rehearing application also alleges, however, that the explanation of principles relating to the burden of proof at pages 36-39 of the Decision fails to follow the law, as articulated in LaPadre v. Dept. of Water and Power (1995) 27 Cal.2d 471 and in 1 Witkin California Evidence (4th ed. 2000) Evidence In Administrative Proceedings, section 61, page 66. The language AT&T relies upon in the Witkin treatise states only the general proposition that "the burden is on the party having the `affirmative of the issue'[.]" (Ibid.) The Decision explained that it chose not to rely on this formulation of the rule because concepts relating to the "affirmative of the issue" were no longer current, and instead chose to seek guidance from the standard contained in Evidence Code section 500. (Decision at p. 37.)
The rehearing application claims that it is error for the Decision to determine to be guided by the provisions of the Evidence Code rather than the portion of Witkin AT&T relies upon because Witkin is "a recognized legal treatise in California..." (Rehg. App. at p. 5.) AT&T further contends that the portion of Witkin it cites is particularly relevant because it discusses administrative proceedings. These claims fails to demonstrate error because the rehearing application cites no authority for the proposition that the Commission was required to follow a general description of the law contained in Witkin when other authority suggested a different approach.
Nevertheless, the Decision's explanation of its approach could have been clearer. It appears that part of AT&T's misunderstanding of the Decision's holdings is based on the fact that the Decision described an exemption based on section 2883, subdivision (e) using language contained in subdivision (a). The Decision's discussion of the burden of proof, at pages six to seven, and its description of the "existing technology and facilities" exception, on page six, should be modified to clarify the Decision's approach.
In addition, the description of what UCAN must prove under the evidentiary principles the Decision chose to adopt is quite limited-and appears to be inconsistent with the Decision's actual approach to evaluating the record. (Cf., Decision at p. 37.) The Decision concurs with UCAN's position that AT&T did not provide warm line service in a way that was allowed by the statute because it imposed time limits (for which the statute does not provide). Further, when the Decision weighed the evidence, its findings made it clear that we concurred with UCAN's claim that blanket, state-wide restrictions on warm line service bore little relationship to transitory numbering concerns that were limited to specific area codes. (Decision at p. 21.) In light of those contentions, we required AT&T to demonstrate a connection between the numbering concerns it raised and the specific policy it adopted-and AT&T failed to do so because it only provided generic information that was equivocal.27
Yet the Decision's discussion of the burden of proof states:
In our view, the substantive law of § 2883 requires a complainant to carry the burden of proof as to these key cause of action elements: (1) that the defendant is a local telephone corporation; (2) that existing and/or new residential telephone connections exist within defendant's service area; and (3) that one or more of the residential telephone connections do not have "911" emergency service. With this showing, it becomes the defendant's burden to establish a defense, such as the unavailability of existing technology or facilities.
This language may correctly describe what technical principles of evidence require, but it is not helpful to understanding our decision because it does not reflect the analysis we actually undertook. We will modify the Decision so it clearly reflects the analysis we conducted in this case.
In addition, it is important to note that the discussion of the burden of proof is, to a large extent, immaterial. This was not a close case that turned on fine points of the law of evidence. We do not believe that AT&T would have prevailed even under the extremely favorable standard it proposed. AT&T contended that all it needed to do to win this case was to "cast doubt" on UCAN's contentions, yet it failed to rebut UCAN's claims. AT&T's claims about numbering shortages did not show that there was any relationship between the concerns AT&T raised and the warm line policy it adopted. We found, at page 19 of the Decision, that:
AT&T does not make a recent factual showing of actual or prospective number shortages or that its 180-day termination policy and policy of not connecting new residential units are properly calibrated in response to a shortage risk.
As a result, AT&T's claims did not "cast doubt" on UCAN's contentions. In fact, as discussed in detail below, we found that the disparity between the justifications AT&T provided in support of its conduct and the statute's actual requirements was so great that it contributed to our conclusion that AT&T had not acted in good faith. Under these circumstances, the claim that the Decision's findings are the result of an erroneously applied burden of proof miss the point: AT&T clearly contravened the requirements adopted by the Legislature in section 2883, and should be penalized.
C. The Presiding Officer Followed Correct Principles of Law in Developing the Record.
1. The Law Does Not Require the Commission to Strike the Testimony of UCAN's Witness Murray.
UCAN filed prepared testimony from two witnesses in this proceeding: Michael Shames, UCAN's Executive Director, and Terry Murray, a telecommunications expert with an extensive background, who has participated in numerous complex regulatory proceedings before state commissions and the FCC. (Decision at p. 49.) AT&T moved to strike the testimony of both these witnesses. The motion made by AT&T with respect to Mr. Shames' testimony was, for the most part, granted: the opinions expressed in that testimony were deemed inadmissible, and the relevance of Mr. Shames testimony about the legislative history of section 2883 was called into serious question. (Ruling Following Final Prehearing Conference, August 15, 2006, at p. 4.)
The Presiding Officer carefully reviewed AT&T's motion with respect to Ms. Murray's testimony, but ultimately concluded that the testimony should be admitted into the record. AT&T had challenged Ms. Murray's testimony on the grounds that she was not qualified to offer expert opinion on matters relating to the physical structure of AT&T's network and the effect of "numbering availability" and "capacity constraints" on AT&T's network. (Ruling Following Final Prehearing Conference, August 15, 2006, at p. 5.) The Presiding Officer discussed Ms. Murray's testimony with counsel for UCAN and AT&T at the final prehearing conference and based his decision on material submitted describing Ms. Murray's qualifications. After comparing Ms. Murray's qualifications to the matters addressed in her testimony, the Presiding Officer concluded that "her special knowledge, education and experience allow her to form an opinion on all subjects touched by her testimony." (Ruling Following Final Prehearing Conference, August 15, 2006, at p. 5.) The Presiding Officer further stated he could account for differing levels of expertise held by witnesses by giving each witnesses' testimony an appropriate weight based on that witnesses' qualifications.
AT&T claimed this approach was in error in its appeal of the Presiding Officer's decision. We denied AT&T's appeal on two grounds. First, we found that the Presiding Officer's ruling on this evidence did not appear to be erroneous, and that, consistent with California trial practice, we were reluctant to disturb an evidentiary ruling made by the primary fact-finder. (Decision at p. 41.) In support of this holding, the Decision pointed to the record, which showed that Ms. Murray, in addition to her qualifications as an economist, had experience in the specific areas of concern to AT&T. Previously, Ms. Murray worked on questions of telephone number capacity in other regulatory proceedings dealing with costs and with competition issues, and had developed expertise about the engineering and operation of the primary components of the telephone network over the course of her extensive career.
Second, we noted that in resolving this case the Presiding Officer had considered the testimony of both parties, analyzed these contentions in light of one another, and accorded the appropriate weight to the parties testimony based on their witnesses' expertise. (Decision at p. 49.) Thus the concerns AT&T had expressed about Ms. Murray's testimony had been addressed through the weighing of the evidence. With respect to the weighing of the evidence, the Decision's holdings also make clear that AT&T's appeal had rested on a faulty premise. AT&T appeared to believe that if the Commission made a finding adverse to AT&T, that finding would have to be "based solely on Ms. Murray's Testimony." (Appeal Of Presiding Officer's Decision at p. 29 (original emphasis).) However, the Decision pointed out that it had made its determinations by relying on a variety of evidence from different sources. The Presiding Officer's decision relied on AT&T's "own admission[s]." The Presiding Officer further relied on the documents attached to Ms. Murray's testimony, in addition to the testimony itself. Finally the Presiding Officer's decision considered and relied upon testimony from AT&T's witnesses when reaching its conclusions. (Decision at p. 50.)
The rehearing application again alleges that it was error for the Decision to consider Ms. Murray's testimony, "and the error was prejudicial to AT&T. Ms. Murray's testimony should have been excluded from evidence, and UCAN's case dismissed for a failure of proof." (Rehg. App. at p. 6.) This claim is based on the two points AT&T raised in its appeal of the Presiding Officer's decision. First, AT&T asserts that Ms. Murray cannot speak to network issues because those issues involve engineering questions. The rehearing application re-states AT&T's critique of Ms. Murray's ability to testify on these points: her testimony was not designed to address engineering questions, she had no engineering background, and that she did not perform her own independent study of AT&T's network. (Rehg. App. at pp. 7-8.)
These allegations do not demonstrate error because they do not take into account the fact that the Decision resolved this matter by considering UCAN's position, and the material UCAN submitted in support of its position, as well. The Decision found that the record showed Ms. Murray had, in the course of her work on cost and competition issues, developed sufficient expertise in the area of numbering capacity to allow her to provide the testimony she submitted in this proceeding. Similarly, the Decision found that materials submitted in support of Ms. Murray's qualifications showed that she had sufficient knowledge about the physical structure of the components of the telephone network to provide the testimony she submitted.28 (Decision at p. 49.) Thus the rehearing application is incorrect to claim that the conclusion that Ms. Murray had the ability to form the opinions contained in her testimony was "without ... elaboration" or that the Decision did not "tie the record evidence concerning Ms. Murray's education and experience to the subject areas" about which she testified. (Compare Rehg. App. at p. 9 with Decision at p. 49.)
The rehearing application also relies on case law stating the general proposition that an expert witness must have expertise in the particular subject matter about which that witness testifies. (Rehg. App. at p. 9.) This authority does not demonstrate that the Decision is in error. The rehearing application only states a general rule-without showing that the rule was not applied in this case. The Presiding Officer specifically reviewed Ms. Murray's credentials and compared those credentials with the statements made in her testimony before concluding that she had, in the words of Evidence Code section 801, subdivision (b), special knowledge, education and experience that allowed her to form an opinion on the issues addressed in her testimony. (Compare Rehg. App. at p. 9 with Decision at p. 49.) That determination was not made solely on the basis of Ms. Murray's overall credentials, as AT&T implies-it was made based on her specific experience with numbering issues and the specific types of knowledge she had garnered on that topic in the course of her work on telecommunications issues. (Decision at pp. 49-50.)
The second claim of error regarding Ms. Murray's qualifications also re-states the position AT&T took during litigation: because, in AT&T's view, Ms. Murray was not qualified to offer her testimony, the Commission was legally barred from making any findings adverse to AT&T. According to the rehearing application, "the Commission cannot premise a statutory violation and fine against AT&T in a complaint case by criticizing AT&T's testimony...." (Rehg. App. at p. 10.) That is, AT&T contends that factual findings adverse to AT&T only rest on a conclusion that AT&T's evidence failed to persuade the Commission. As an initial matter, this claim is factually incorrect. Ms. Murray's testimony itself was not the only evidence UCAN offered in support of its case. Ms. Murray's testimony was accompanied by documentary attachments, which the Decision relied upon (Decision at pp. 49-50), and UCAN further provided briefing containing legal argument on the main issues in this case, including how section 2883 applied to the specific facts at issue here. However, in explaining this point the Decision overemphasized the extent to which it relied on other material in addition to Ms. Murray's testimony, and it should be modified to more accurately describe its approach.
Further, we did not base our holdings merely on criticism of AT&T's position. We based our findings on our independent reading of the material AT&T submitted to support its contentions. For example, while AT&T contended that the large number of our decisions approving area code splits showed that numbering shortages required it to limit warm line service, we found that this same evidence also "suggests the ability and success of the regulatory process to provide needed numbers." (Decision at p. 18.) We further considered AT&T's own internal documents and found that they did not show that the company had designed its warm line policies so that service was provided "to the extent permitted by existing technology or facilities" as the statute requires. Rather, we found that AT&T's documents show that the company chose to terminate warm line service after 180 days because of a generic, and unproven, concern that numbering shortages "could" occur. (Decision at p. 19.)
If the rehearing application means to claim that we cannot base findings adverse to AT&T on evidence submitted by AT&T, the law does not support that contention. No authority requires us to adopt AT&T's view of its own evidence. Instead, this Commission is required to undertake a reasoned analysis, to consider all of the material evidence and contentions made on the record, and to properly explain its holdings. (Pacific Tel. & Tel. Co. v. Public Utilities Com. (1965) 62 Cal.2d 634, 648; Greyhound Lines v. Public Utilities Com. (1967) 65 Cal.2d 811, 813.)
In this connection, the rehearing application incorrectly characterizes the Decision's weighing of the evidence as an improper attempt to "second guess AT&T engineers and operations personnel, who are responsible for keeping its network up and running." (Rehg. App. at p. 10.) We are, in fact, specifically charged with the task of weighing the evidence in a complaint case and determining which material is persuasive, and which is not. Simply using a pejorative term ("second guess") to describe the act of weighing the evidence does demonstrate that the Decision is in error. AT&T cites to no legal authority to support its claim that we cannot evaluate the contentions made by AT&T's engineers, in light of the entire record, and cannot conclude that those contentions are not persuasive.
2. Material Submitted with AT&T's Reply Brief Did Not Meet the Requirements For Official Notice.
The Application for Rehearing further asserts that the Decision erred because it did not reverse an evidentiary ruling. The Decision stated that we "do not lightly disturb the evidentiary rulings of the Presiding Officer in our proceedings." (Decision at p. 51.) This appears to be a sound policy, as a detailed examination of the background of this evidentiary dispute shows.
The evidentiary ruling in question struck the discussion of "Form 502 utilization data" from AT&T's Reply Brief. (Rehg. App. at pp. 36-39.) This ruling was based on extensive argument from the parties, contained in several sets of pleadings. The context for this dispute was the parties' stipulation that a trial type hearing need not be held in this case. Before briefs were filed, the parties and the Presiding Officer had determined what material would form the record in this case, based on a stipulation between the parties. The parties stipulated that an evidentiary hearing would not be necessary if this case were submitted and briefed on the materials that were admitted at the July 28, 2006 Prehearing Conference. (Prehearing Conference Transcript, vol. 3, at pp. 47-48.) The Form 502 utilization data was not part of this record, and when AT&T sought to present calculations based on the Form 502 utilization data in its Reply Brief, it requested that the Commission take official notice of this material. (AT&T Reply Brief at pp. 9 (fn. 31), 12 (fn. 41).)
The Form 502 utilization data consisted of "information generated by AT&T" that had been provided to FCC. (Ruling Resolving Pending Motions Re Record and Submission of Proceeding, December 6, 2006, ("Ruling Resolving Pending Motions") at p. 3.) This information was in the form of raw data, but AT&T asserted that calculations based on this data would be more accurate than the calculations UCAN relied upon in its Opening Brief. UCAN's calculations had been taken from a report issued by the FCC's Wireline Competition Bureau that aggregated information about the amount of telephone numbers available to all carriers. (UCAN Opening Brief at p. 40.) According to AT&T, UCAN improperly relied on the Wireline Competition Bureau's calculations because they were not "AT&T-specific[.]" (AT&T Reply Brief at p. 9.)
UCAN objected to the calculations AT&T made using the Form 502 utilization data and moved to strike the portions of AT&T's Reply Brief that contained those calculations. UCAN's motion asserted that the Commission's Rules of Practice and Procedure required such calculations be submitted with a party's prepared testimony. According to UCAN, the Commission could not rely on these calculations because: (i) no witness had provided testimony explaining how they were made, (ii) such an explanation did not appear in AT&T's Reply Brief, and (iii) the methodology used to make these calculations had not been tested at a hearing. (UCAN's Motion to Strike References to Extra-Evidentiary Documents, September 22, 2006, at pp. 3-4, 6.)
UCAN further asserted that it would not have stipulated to forgo hearings if AT&T had sought to introduce the calculations it made based on the Form 502 utilization data into the record before the July 26, 2006 Prehearing Conference. (UCAN's Motion to Strike References to Extra-Evidentiary Documents, September 22, 2006, at p. 2.) UCAN contended that hearings were required to test AT&T's calculations because the method used to make those calculations was incorrect. UCAN claimed that AT&T's Reply Brief made arguments based on the results of "simple average" calculations (performed by AT&T's lawyers) when the nature of the Form 502 utilization data required that a "weighed average" be calculated instead. (UCAN's Motion to Strike References to Extra-Evidentiary Documents, September 22, 2006, at p. 6.)
AT&T responded to UCAN's motion to strike, and also filed a separate motion reiterating and expanding upon the request to have Commission take official notice of the Form 502 utilization data made in its Reply Brief. In its opposition to UCAN's motion to strike AT&T asserted that it was not required to submit this information with its prepared testimony, as UCAN had claimed, because it was a proper subject for official notice. According to AT&T, "parties routinely cite to reports, notices, pleadings, and decisions on file with the FCC in briefs without first identifying those materials in prepared testimony." (Response of AT&T to Motion to Strike, October 20, 2006, at p. 2.) AT&T supported its claim that the Form 502 utilization data was a proper subject of official notice by stating that it was "on file" with the FCC. (Response of AT&T to Motion to Strike, October 20, 2006, at p. 4.)
Finally, AT&T argued that the Form 502 utilization data was equivalent to the 2006 NRUF Analysis, for which UCAN had separately sought official notice. According to AT&T, these materials were equivalent because they had not been identified by the parties in their opening testimony and were being offered in response to positions advanced by the other party during the briefing phase. AT&T further claimed that both parties' submissions were similar because these materials were officially noticeable and contained data relating to the important question of numbering issues. (AT&T's Response to Motion to Strike, October 20, 2006, at p. 4.)
AT&T reiterated these points in its response to UCAN's motion for official notice of the 2006 NRUF Analysis. There AT&T claimed that "based on past practice, official notice is not necessary." (AT&T's Response to Motion for Judicial Notice, October 2, 2006, at p. 2.) According to AT&T, both UCAN and AT&T should have been allowed to cite to documents "on file" with government agencies without having to first request official notice. (AT&T's Response to Motion for Judicial Notice, October 2, 2006, at p. 3.) Although AT&T's pleadings are not explicit, it appears that AT&T was suggesting that the Presiding Officer compromise on the two outstanding motions for official notice and rule that both AT&T's material and UCAN's material should be noticed by the Commission.
The Presiding Officer did not take the approach subtly suggested by AT&T. He concluded that UCAN's material would be considered in rendering his decision because both parties had asserted that it met the requirements of official notice and AT&T had formally stated that it had no objection to this approach. (Ruling Resolving Pending Motions at p. 4.) However, the Presiding Officer found that the Form 502
utilization data did not meet the statutory requirements for official notice.29 The ruling found that the Form 502 utilization data had been prepared by AT&T itself and submitted to the FCC, placing it in a category of material that does not qualify for judicial notice. Stephens v. Superior Court (1999) 75 Cal.App.4th 594, 607-608 and other cases cited by the ruling find that material prepared by private parties and then submitted to a government agency is not comparable to material produced by a governmental body, which is entitled to official notice. (Ruling Resolving Pending Motions at p. 3.)
In the Decision, we rejected AT&T's appeal of the Presiding Officer's ruling. The Decision pointed out the difference between the evidentiary status of the 2006 NRUF Analysis and calculations made by AT&T using Form 502 utilization data. One set of materials had been authored by a governmental body and offered for the Commission's consideration without objection from the other party. On the other hand, AT&T's calculations were made by AT&T, using its own data and the Commission's ability to rely on these calculations had been disputed.30 (Decision at p. 50.)
The application for rehearing again claims that the determination not to consider calculations based on the Form 502 utilization data was improper. (Rehg. App. at p. 36.) The rehearing application first contends that the determination not to rely on the Form 502 utilization data was legally erroneous because the data "serves to contradict and undermine the contentions made by UCAN...." (Rehg. App. at p. 37.) The mere fact that AT&T believes this material is relevant, without more, does not establish that it is a proper subject for official notice. (Cf., Mangini v. R. J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063 (compiling relevant law).) In addition, the relevance of the calculations AT&T made using the Form 502 utilization data was not established. Because UCAN asserted that AT&T's calculations were made improperly, it remains unclear whether or not those calculations are material to this proceeding.
The rehearing application further contends that the Decision is in error because it only explained why it upheld the Presiding Officers ruling on the Form 502 utilization data by referring to AT&T's position on the 2006 NRUF Analysis. (Rehg. App. at p. 37.) This claim attempts to make the Decision's holding appear to be a non sequitur. However, the Decision's holding directly addressed the reasons AT&T advanced for overturning the Presiding Officer's evidentiary ruling on the Form 502 data.31 AT&T had argued that "either all reports using FCC Form 502 data and the data itself should be admitted, or they should all be excluded." (Appeal of Presiding Officer's Decision at p. 35.) The Decision properly responded to this contention32 by pointing out that AT&T's appeal relied on a claim of parity between two sets of materials that were, in fact, different. Both parties had agreed that the 2006 NRUF Analysis qualified for official notice, and AT&T explicitly had not objected to the Commission considering this information. On the other hand, the calculations AT&T had made using the Form 502 utilization data did not appear to be a proper subject for official notice, and the underlying methodology used to make those calculations was further in dispute.
It is also worth noting that the rehearing application is incorrect when it claims that AT&T sought to introduce the Form 502 utilization data for the purposes of rebutting the 2006 NRUF Analysis. (Compare Rehg. App. at p. 38.) These materials were not linked in the litigation phase of the proceeding because they were introduced independently by both parties in their concurrently filed Reply Briefs. AT&T in fact relied upon the Form 502 Utilization data to rebut claims UCAN had made based on a Wireline Competition Bureau report. (AT&T's Reply Brief at p. 8 (fn. 28).)
The rehearing application further argues, however, that AT&T did not "unequivocally stipulate" that official notice should be granted to the 2006 NRUF Analysis. (Rehg. App. at p. 38.) According to the rehearing application, AT&T took the position that official notice could not be given to the 2006 NRUF Analysis without giving notice to the Form 502 utilization data. AT&T's response to UCAN's request for official notice states: "AT&T has no substantive objection to the Commission taking official notice of the report that is the subject of UCAN's requests as it is a report on file with the NANPA-an agency governed by the ... FCC...." (AT&T's Response to Motion for Judicial Notice, October 2, 2006, at p. 1.) Further, the rehearing application does not demonstrate error because, as discussed above, the connection AT&T seeks to establish between 2006 NRUF Analysis and the Form 502 utilization data does not exist. As this analysis shows, the Presiding Officer correctly addressed the evidentiary dispute brought before him. However, this analysis shows that this dispute was complex, and we will modify the Decision to include a more extensive discussion on this topic.33
The rehearing application makes one further argument in favor of having its calculations based on the Form 502 utilization data considered by the Commission. AT&T claims that under the "completeness doctrine" embodied in Rule 13.7, subdivision (c), "AT&T had the legal right to have the carrier-specific Form 502 utilization data admitted into evidence in response to the 2006 NRUF [and NPA Exhaust Analysis] Report submitted by UCAN." (Rehg. App. at p. 38.) Rule 13.7 provides that if a party offers portions of a document into evidence, other parties may review the entire document and "offer in evidence other portions thereof believed material and relevant."
AT&T's claims misapply this rule. As an initial matter the rule does not say that a party has a "legal right" to have the Commission accept particular material into evidence. (Compare, Rehg. App. at p. 38.) Rule 13.7 only provides that a party may "offer" material into evidence. Further, Rule 13.7 speaks to the situation presented when a portion of a specific document is offered into evidence. In that case parties may review the entire document and offer "other portions" contained by the same document into evidence. The material at issue here-calculations made by AT&T based on the Form 502 utilization data-is clearly not "contain[ed]" in the 2006 NRUF Analysis. And AT&T does not allege that the underlying Form 502 utilization data is part of the 2006 NRUF and NPA Exhaust Analysis: it only claims that it is the data on which that document is based.
As discussed above, the rehearing application is also incorrect when it claims that AT&T sought to introduce the Form 502 Utilization Data into evidence "in response to the 2006 NRUF Report." (Rehg. App. at p. 38.) As explained above, AT&T sought to introduce its calculations based on Form 502 utilization data in response to a different report relied upon by UCAN: a document issued by the FCC's Wireline Competition Bureau. (AT&T Reply Brief at p. 8 (fn. 28).) AT&T, therefore, meets few, if any, of the criteria for the application of Rule 13.7, subdivision (c).
D. The Results of A Settlement in A Different Case Do Not Bar the Commission from Resolving This Case.
The rehearing application next asserts that the Decision's description of the extent of the record developed in the related case against Cox is in error. In its briefs and its Appeal of the POD, AT&T had asserted that the dismissal of the complaint against Cox barred the Commission from finding that AT&T had contravened section 2883. The Decision disagreed, pointing out that the law specifically allowed the Commission to evaluate individual proceedings on their own merits. Further the Decision notes that the Commission has authority to determine which matters warranted a commitment of limited public agency resources and which matters had less of a priority in claiming those resources. (Decision at p. 26.)
The Decision also pointed out that the record in C.05-11-012 did not allow us to conclude that the proceeding against Cox and the proceeding against AT&T involved similar practices. The Decision found that while a complete evidentiary record had been developed in this proceeding, "[n]o such complete evidentiary record has been compiled for Cox's practices." (Decision at p. 55 (Finding of Fact 19).) The Decision also pointed out that the record that did exist in C.05-11-012 had not been briefed, and we had not had the opportunity to draw any conclusions in that case before it settled.
The rehearing application does not challenge our legal conclusion that the approval of a settlement in the Cox proceeding does not prevent us from penalizing AT&T in this case. However, the rehearing application claims that evidence exists that "establishes that AT&T's warm line practices are similar, if not identical to Cox's practices." (Rehg. App. at p. 32.) According to AT&T, "disregard of this evidence is error." (Rehg. App. at p. 34.) As an initial matter, this claim is not material because the rehearing application does not dispute the legal conclusion that we may properly determine how we will exercise its enforcement authority on a case by case basis. Claims that there are similarities between this case and the Cox case cannot demonstrate error when no impropriety results from the fact that one case settled and one was resolved through adjudication.
In addition, the rehearing application does not correctly describe the extent of the record in the Cox proceeding or the inferences that can be drawn from that record. AT&T relies on "statements made at ... hearings" by Cox representatives to claim that a record has been developed that allows the Commission to find similarities between Cox's warm line policies and AT&T's policies. (Rehg. App. At p. 34.) There was no formal evidentiary hearing in the Cox case, and the statements to which AT&T refers were made at a prehearing conference. Moreover, simply identifying these statements does not show that a "complete evidentiary record" that would allow the Commission to conclusively determine if Cox's policies were the same as AT&T's was developed. Because C.05-11-012 settled after the end of discovery, the Decision is correct in its description of the state of the record in that proceeding.
E. The Decision Properly Concluded that AT&T Did not Act In Good Faith, But Inadvertently Relies on the Wrong AT&T Subsidiary's Tariff as it Discusses Reparations.
In several places, the Decision made it clear that we strongly disapproved of AT&T's conduct. In Conclusion of Law 3, the Decision described the 180-day limit AT&T places on warm line service as "unreasonable, arbitrary and capricious." (Decision at p. 56.) We noted that AT&T's warm line policy had potentially serious public safety ramifications, but that it was adopted "without an assessment of need, number, facilities, and equipment availability...." (Decision at p. 33.) The Decision held that this conduct did not show good faith. (Decision at p. 30.) The Decision further found that the fact that AT&T engaged in impermissible ex parte contacts "concerning substantive issues affecting this proceeding ... undermines any good faith claim in this proceeding." (Decision at pp. 30-31.) In addition, the Decision's discussion indicates that it considered AT&T's interpretations of section 2883 to be unreasonable, and that those unreasonable interpretations further detracted from AT&T's claims of good faith. (Decision at p. 40.)
In other places, the Decision characterizes AT&T's practices as amounting to "willful misconduct." (E.g., Decision at p. 33.) The Decision appears to have used the concepts of willful misconduct and bad faith to refer to the same unsatisfactory conduct on AT&T's part, and used these two concepts together when it sought to explain why no "safe harbor" was available to AT&T based on the facts of this case. (Decision at pp. 39-40.) In addition, the Decision relied on a finding of willful misconduct to conclude that the limitation of liability provisions in Rule 14 of AT&T's tariff should not apply its conduct here. The Decision determined the record in this proceeding was not sufficiently well developed to allow it to award reparations but, if the limitation of liability provision suspended, "customers and other persons [could] pursue other remedies otherwise available to them at law or in equity." (Decision at p. 35.)
The rehearing application claims the Decision errs when it finds that AT&T engaged in willful misconduct. (Rehg. App. at p. 31.) In reviewing this claim, we discovered that the Decision does not refer to the correct AT&T Tariff Rule 14, because two different AT&T entities have filed tariffs with this Commission. A brief explanation is in order. The company that is now called AT&T, formerly SBC Communications, Inc., acquired its current name following its acquisition of the former AT&T. The current AT&T is, and was, the parent of the California utility that is the defendant in this complaint. That California utility that currently does business under the name "AT&T California" and is, and was, identified by the number "U 1001 C" in its filings at the Commission. However, prior to the acquisition of the former AT&T, a subsidiary of the former AT&T also did business in California. That company was a "CLC" and a long-distance provider, and it filed tariffs covering those services.34 That company is identified by the number "U 5002 C" in its formal filings with the Commission. The Decision inadvertently refers to the tariffs of the former CLC subsidiary of AT&T (U 5002 C) when it should have referred to the tariffs of the new AT&T's subsidiary, "AT&T California" (U 1001 C).
The correct tariff provision relating to the defendant's limitation of liability, Schedule Cal.P.U.C No. A2.2.1.14.A.1 reads:
The provisions of this rule do not apply to errors and omissions caused by willful misconduct, fraudulent conduct or violations of law.
Because AT&T's conduct is a violation of law, AT&T's liability is not limited by Rule 14 of its tariff. As a result, it is not necessary for the Decision to find that AT&T engaged in willful misconduct in order to hold that "AT&T's liability to a customer or other person for damages resulting from its violation of [section] 2883 is not limited by its tariff." (Decision at p. 57 (Conclusion of Law 8).) We will modify the Decision so it refers to the correct tariff provision, and we will simplify the interchangeable use of concepts of willful misconduct and lack of good faith by referring only to a lack of good faith.
F. The Decision Correctly Concluded that No "Safe Harbor" Shields AT&T From Liability Under Section 2883.
The rehearing application asserts that the law creates a "safe harbor" that prevents companies from being found to have committed a "statutory violation if a good faith attempt has been made based on a tenable interpretation." (Rehg. App. at p. 28.) The authority cited by the rehearing application in support of this claim does not appear to be valid or on point. White v. Davis (2002) 108 Cal.App.4th 197, upon which the rehearing application relies, was reversed in part and remanded by the California Supreme Court in White v. Davis (2003) 20 Cal.4th 528.35 The language quoted in the rehearing application is, further, not a holding of White v. Davis (2002), supra, but rather dicta explaining the "circumstances" which led the Court of Appeal to avoid resolving a factual issue that had not been addressed by the trial court. (White v. Davis (2002), supra, 108 Cal.App.4th, at p. 231, fn. 13.) Moreover, the Court of Appeal in White v. Davis (2002), supra, was not stating a general rule. The court relied on the fact that the statute under consideration, the federal Fair Labor Standards Act, specifically provided that penalties may be excused under certain circumstances. (29 U.S.C.S. § 260.) As a result, the authority contained in White v. Davis (2002), supra, is not relevant here.
Similarly, the judgment in Reynolds v. Hartford Financial Services Group, Inc. (9th Cir. 2006) 435 F.3d 1081, also cited by the application for rehearing, was reversed and remanded by the U.S. Supreme Court in Safeco Insurance Co. of America v. Burr (2007) 551 U.S. 47, 167 L.Ed.2d 1045, 1067. While the Supreme Court concurred with some of the subsidiary holdings in Reynolds v. Hartford Financial Services Group, Inc., it does not appear to have adopted the language quoted in the rehearing application. (Cf., Spano v. Safeco Corp. (9th Cir. 2008) 511 F.3d 1206.)
Further, the principles that may be established by these three cases are not applicable here. These cases involved the federal Fair Credit Reporting Act. The Ninth Circuit held that the liability that act imposed for "willfully fail[ing] to comply" with certain of its provisions also applied in cases of reckless disregard of statutory duties. (Ibid.) The language from Reynolds v. Hartford Financial Services Group, Inc., supra, quoted in the application for rehearing stated the Ninth Circuit's view of how a company could avoid showing such reckless disregard. This case, on the other hand, does not involve the "willfully fail[ing] to comply" standard under the Fair Credit Reporting Act. Penalties were imposed in this case under section 2107 which imposes liability on utilities "which violate or fail to comply" with sections 201 through 2119 of the Public Utilities Code. As a result, Reynolds v. Hartford Financial Services Group, Inc., supra, even if it had not been reversed by the U.S. Supreme Court, is not applicable here.
Moreover, the rehearing application's claim that "AT&T's conduct should be evaluated in the context of the Commission not giving prior guidance" on the requirements of section 2883 relies on two faulty assumptions. (Rehg. App. at p. 28.) First, in the absence of any legal requirement that the Commission provide a "safe harbor" to AT&T this claim is a policy argument, and does not demonstrate legal error. Second, as UCAN pointed out, the Commission has not been silent about section 2883's requirements. The Commission's decisions indicate that it expected carriers to comply with the statute, and not to allow the complexity of their networks, or the regulatory structure, to prevent them from providing the required warm line access to emergency 911 service.
For example, when the Commission implemented local telephone competition, it described 911 service as "essential to every Californian" and ordered all carriers to take the necessary steps to make sure that new entrants (called "competitive carriers" or "CLCs") provided warm line service. (Re Local Competition [D.95-12-056] (1995) 63 Cal.P.U.C.2d 700, 726.) Specifically, the Commission made it clear that a type of CLC called a "reseller" had "an obligation to provide warm line service to a customer [that] shall continue as long as the CLC has an arrangement for resale service to the end users' premises."36 (Re Local Competition [D.95-12-056], supra, at p. 727.) The Commission further provided: "Following termination of the resale arrangement, the obligation to provide warm line service shall revert to the underlying facilities based" carrier whose facilities the reseller had relied upon. (Ibid.) The fact that the Commission required the obligation to provide warm line service to continue for the length of a resale agreement and then revert to another carrier when a resale agreement ended clearly indicates that the Commission construed section 2883 to establish a requirement that was not easily avoidable, and did not expire after a certain period of time.37
By way of further example, the rules adopted by the Commission when it granted certain CLCs certificates to operate as telephone carriers indicate that we expected warm line service to be provided not just at residences where billed service had been disconnected but at new residences as well. (Competitive Local Exchange Service [D.96-02-072] (1996) 65 Cal.P.U.C.2d 65, 94 (Ordering Paragraph 1).) The adopted rules stated that warm line service applied both in the case of disconnected billed service and "for newly installed lines." (Id. at p. 107.) This description of section 2883's requirements is consistent with the Decision's rejection of AT&T's contention that the statute was written in way that obviated the need to provide warm line service at new residences. Thus, the rehearing application is incorrect to claim that the Decision "establishes a first blush interpretation of the statute since it was enacted in 1995."38 (Rehg. App. at p. 29.)
In addition, past decisions give no indication that we interpreted section 2883 to allow carriers to curtail warm line service-unless they encountered a specific situation where facilities were physically unavailable at the actual time when warm line service was curtailed. One decision addressed a situation where warm line service was curtailed, Bayside Village Apartments v. Pacific Bell [D.97-11-029] (1997) 76 Cal.P.U.C.2d 491. The facts of this decision involved a shortage of facilities at an apartment building. This shortage of facilities sometimes required the oldest warm line connection to be disconnected when new tenants arrived and required the use of that equipment to receive service. (Id. at p. 495.) Thus, Bayside Village Apartments v. Pacific Bell [D.97-11-029], supra, suggests that we condoned the termination of warm line service where there was is a specifically-identifiable lack of equipment that precluded a carrier from providing service to subscribers of billed service, but it does not suggest that a carrier could legally terminate warm line service based on the potential that a shortage of facilities might develop in the future. As this review of our past decisions demonstrates, the claim that "[n]one of these decisions provides any guidance whatsoever" is inaccurate and does not demonstrate error. (Cf., Rehg. App. at p. 28.)
Finally, the Decision correctly found that AT&T's "safe harbor" theory is inapplicable here for another reason: because AT&T did not engage in a good faith attempt to comply with section 2883. As discussed above, it does not appear that AT&T considered or evaluated the relevant holdings contained in our past decisions as it determined to curtail warm line service. The Decision also points out that "AT&T's termination policy `was implemented without the analysis of facilities and equipment availability, number availability or the needs of customers in the specific areas affected.'" (Decision at pp. 29-30, 39.) Under those circumstances it was not error for the Decision to deny AT&T a "safe harbor."
G. The Protections Afforded Under the Due Process Clauses of the United States and California Constitutions Do Not Prevent This Commission from Fining A Regulated Utility for Violating a Statute.
The rehearing application asserts that the Decision "violates AT&T's right to due process by imposing a penalty without providing constitutionally adequate notice of the prohibited conduct." (Rehg. App. at p. 39 (capitalization altered).) However, as discussed above, section 2883 provides a clear description of the warm line requirements that the Legislature imposed on regulated telephone carriers. (See pages 6, 58, above.) The Decision specifically points out that it did not "create new standards and retroactively enforce[] them against" AT&T. Instead, we applied an existing statute to a regulated utility that is "charged with notice of what conduct is prohibited under applicable statutes...." (Decision at p. 26.)
Moreover, as discussed above, our past decisions discussing section 2883's requirements are not vague or inconsistent. Those decisions clearly articulate the principle that access to emergency 911 service via a warm line connection is an essential service that is to be provided to every Californian. (Re Local Competition [D.95-12-056], supra, 63 Cal.P.U.C.2d at p. 726.) The rehearing application, however, relies upon General Elec. Co. v. EPA (D.C. Cir. 1986) 53 F.3d 1324 and similar cases for the proposition that in the "absence of notice" an agency may not impose a civil penalty. These cases describe principles that are specific to the federal administrative system, and do not apply here. In General Elec. Co. v. EPA, supra, the regulated entity, General Electric ("GE"), began recycling solvents contaminated with PCBs. GE distilled the solvent to produce a highly toxic residue, which it incinerated, and a quantity of recycled solvent that was "nearly pure" with probably undetectable levels of contamination. (Id. at p. 1326.) The recycled solvent was reused. The distillation process complied with applicable regulations. (Ibid.) The court noted that GE's process "produc[ed] environmental benefits." (Id. at p. 1327.) Nevertheless, the EPA interpreted its regulations to require that the solvent be incinerated immediately after its first use and fined GE for undertaking its recycling program. (Ibid.)
The court found that federal law required it to defer "to `permissible' regulatory interpretations that diverge significantly from what a first-time reader of the regulations might conclude was the `best' interpretation of their language." (General Elec. Co. v. EPA, supra, at p. 1327.) As a result, the court determined that it could not overturn the EPA's interpretation of its regulations in this case. (Id. at p. 1330.) Nevertheless, the court also found that that the EPA's interpretation was "so far from a reasonable person's understanding of the regulation" that it could not allow the EPA to impose a fine without giving prior notice that it had interpreted its regulation in this particular way. (Ibid.)
This narrow principle of federal administrative law does not support the rehearing application's broad claim that the Commission cannot impose penalties on AT&T "without any proposed rules or regulations." (Rehg. App. at p. 40.) Except for the provisions of section 2883, subdivision (c), discussed above at pages 29-36, nothing in the statute suggests that the legislatively-imposed warm line requirement is not enforceable unless the Commission issues further rules or regulations. Moreover, the interpretations at issue in the cases cited in the rehearing application stray from the plain language of the underlying regulations. (General Elec. Co. v. EPA, supra, at p. 1330.) It has been found that these "cases from the District of Columbia Circuit" should be construed narrowly and, specifically, "do not stand for the proposition that any ambiguity in a regulation bars punishment...." (United States v. Lachman (1st Cir. 2004) 387 F.3d 42, 57, see also Pub. Util. Code, §§ 1702, 2107.) Thus it is not clear that these cases can provide any guidance in the case of a self-executing statute whose requirements did not become the subject of follow-on regulations, and the rehearing application's claims do not demonstrate error.
One type of due process concern that might be relevant here is described in the principle of "void for vagueness." The rehearing application in fact asserts that the Decision is in error because section 2883 does not meet the standard articulated in Grayned v. City of Rockford (1972) 408 U.S. 104, 107. Principles of void for vagueness are most often addressed in criminal cases or free speech cases. The U.S. Supreme Court has held:
A conviction fails to comport with due process if the statute under which it is obtained fails to provide a person of ordinary intelligence fair notice of what is prohibited, or is so standardless that it authorizes or encourages seriously discriminatory enforcement.
(U.S. v. Willaims (2008) _ U.S. __, 170 L.Ed.2d 650, 657, citing Hill v. Colorado (2000) 530 U.S. 703, 732.)
The rehearing application implies that issues of discriminatory enforcement are relevant here. AT&T refers to the dismissal of the Cox complaint and claims that the March 1998 Letter informed Commission staff of AT&T's policy, and the Commission took no action as a result. However, the fact that the Commission dismissed the Cox complaint at the request of the parties does not show that the underlying requirements of the statute are unclear. Nor does the dismissal of this case at the request of the parties show that the Commission, which served as decision-maker, not prosecutor, is selectively enforcing the statute. Similarly, as discussed above, the March 1998 Letter was written in such a way that it did not inform staff that AT&T had a adopted a policy that might be in contravention of section 2883. The letter stated that AT&T had decided to provide warm line service for only 180 days, but the letter incorrectly tried to place this action in context by stating that warm line service was only required on an "interim[,]" not continuous, basis. (See above at pp. 26-27.) Such a letter does not amount to "notice" that would allow staff to "question[] AT&T's... practices" as the rehearing application claims. (Rehg. App. at p. 39.)39
In terms of the statue's language itself, the rehearing application re-asserts its claim that in this proceeding the Commission interpreted section 2883 for the first time, and used this complaint case as "the means for announcing a particular interpretation." (Rehg. App. at p. 40.) To the contrary, the Decision followed the plain language of section 2883 and applied its terms to the facts at hand. The Decision further did not announce any new or "particular" interpretation of the statute. Rather, in applying the law to the facts of this case, the Decision found that the statute's language was straightforward, and it did not apply second-order interpretational techniques such as reviewing section 2883's legislative history in order to determine it's meaning.40 Instead the Decision considered the record to determine if it showed that AT&T had complied with the clear requirements of the statute.41 As discussed above at pages 61-63, if AT&T was not aware of section 2883's requirements it was not because the statute was unclear but because AT&T did not engage an a good faith effort to determine the statute's requirements.
Finally, the rehearing application contends that the Decision deprived AT&T of due process of law when it determined that AT&T did not provide adequate notice of its warm line policies. The Decision considered the "minimum [] customer information standard" of section 2896, subdivision (a) in conjunction with section 2883, subdivision (c) when it evaluated the notice provided by AT&T and found that notice to be inadequate. According to the rehearing application, AT&T had no notice that the Commission would consider this issue and it was thereby deprived of an opportunity to defend itself. In fact, UCAN's Opening Brief asserted both that AT&T had a specific obligation to provide notice of its warm line service and that AT&T was under a general obligation to provide notice "to customers of all their telephone options, and AT&T's own conduct." (UCAN's Opening Brief at p. 48.) UCAN further reviewed a series of Commission decisions that established generally applicable notice requirements for telephone utilities and asserted that the requirement to provide notice of warm line service was "[f]airly encompassed within such rulings." (UCAN's Opening Brief, August 25, 2006, at pp. 49-50.) Section 2869, subdivision (a), codifies the requirements of the cases UCAN discussed. (Cf., UCAN v. Pacific Bell [D.01-09-058], supra, at p. 17 (slip op.).) AT&T received UCAN's Opening Brief, and filed a Reply to that pleading on September 15, 2006. Further notice was provided to AT&T when the POD, a recommended decision proposed by the Presiding Officer, was made public. (Cf., Rules of Practice and Procedure, Rule 14.1, Cal. Code Regs., tit. 20, § 14.1, subd. (a).) AT&T responded to the POD's discussion of section 2894, subdivision (a) by appealing that aspect of the POD to the Commission, which considered AT&T's contentions as it issued the Decision. (Pub. Util. Code, § 1701.2, subd. (a).) Due process requires that a party be provided with notice, and an opportunity to be heard. The rehearing application does not explain why these procedures did no afford it dues process of law, nor did AT&T suggest during the conduct of these proceedings what additional procedures should have been afforded to it on this issue.
H. Statutes of Limitation Neither Apply to This Administrative Proceeding, Nor Do They Prevent AT&T from Being Penalized.
The rehearing application asserts that the Decision is in error for imposing penalties for the period from May 13, 1997 to August 15, 2006. The rehearing application relies on two provisions in the Code of Civil Procedure ("CCP") which it claims govern proceedings before the Commission: CCP section 338 and CCP section 340, subdivision (b). However, it is clearly established that the statutes of limitations contained in the CCP do not apply to administrative proceedings, as the Decision explained. (Decision at pp. 46-47.) We cited clear authority holding, in the context of an appeal of an administrative decision, that the statute of limitations contained in CCP section 338 only applies: "to the commencement of civil actions and civil special proceedings [citations], which this was not." (Robert F. Kennedy Medical Center v. Department of Health Services (1998) 61.Cal.App.4th 1357, 1361-1362, quoting Little Company of Mary Hospital v. Belshe (1997) 53 Cal. App. 4th 325, 329.)
The application for rehearing, however, asserts that the statutes of limitation contained in the CCP do, in fact apply to the Commission for two reasons. First, a "general legislative policy" has bound the state of California "with respect to the bringing of actions for the enforcement of any and all such rights as may accrue to the state." (Rehg. App. at p. 35, citing Marin Healthcare v. Sutter Health (2002) 103 Cal.App.4th 861.) This "general legislative policy[,]" which was noted in People v. Osgood (1930) 104 Cal.App. 133, 135, weighs against any claim of legislative immunity by the state of California in court proceedings. Although the rehearing application claims that this principle prevents us from fining AT&T because the Commission is "an arm of the state[,]" it does not explain how this general principle overturns the specific rule that the CCP's statutes of limitations do not apply in administrative proceedings. (Compare, Little Company of Mary Hospital v. Belshe, supra, at p. 329, Rehg. App. at p. 35.) Nor does the rehearing application explain how a principle that looks to the identity of a party contradicts a rule that looks to the nature of the proceeding involved.
Second, the rehearing application asserts that the authority relied upon in the Decision is inapplicable because the underlying facts in the leading cases did not involve the imposition of penalties. However, the rulings in these cases are not based on the particular facts involved. These cases state a general principle of law, namely: "Statutes of limitations found in the Code of Civil Procedure, however, do not apply to administrative actions." (Little Company of Mary Hospital v. Belshe, supra, at p. 329, citing Bernd v. Eu (1979) 100 Cal. App. 3d 511, 515.) Nevertheless the rehearing application also claims that the Decision was in error because it did not discuss AT&T's attempt to distinguish these cases. (Rehg. App. at p. 36.) The cases state a clear, dispositive rule, not limited by the court to the facts before it. Therefore AT&T's attempt to distinguish these cases based on their underlying facts does not appear to be material and does not require discussion.
More importantly, AT&T's contentions about the statutes of limitation were also immaterial because they addressed the measure of time that may be used to calculate a penalty, while statutes of limitations address when an action may be brought. Because AT&T engaged in one continuing violation, which was on-going when this case was brought, "no credible argument can be brought that UCAN did not bring a timely action within the applicable statute of limitations." (Decision at p. 47.) We gave our rationale for finding against AT&T on this issue, and the Decision was not required to make further findings on additional issues. (Cf., Greyhound Lines, Inc. v. Public Utilities Com. (1967), supra, at p. 811.)
The rehearing application further asserts that Commission precedent supports AT&T's position. According to the rehearing application, "the Commission has itself recognized that" a statute of limitations found in the CCP might apply in some circumstances. The decision relied upon by AT&T, Strawberry Property Owners Association v. Conlin-Strawberry Water Company, Inc. [D.97-10-032] (1997) 76 Cal.P.U.C.2d 46, does not contain such a holding. That decision rejected a claim that a penalty was barred by CCP section 340 by pointing out that even under "any conceivably applicable statute of limitations" the case at issue had been timely commenced. (Id. at p. 50.) Commission precedent, in fact, supports the Decision's result. In Bidwell Water Company [D.99-04-028] (1999) 85 Cal.P.U.C.2d 667, 671, we explicitly rejected a claim that statutes of limitations contained in the CCP prevented it from levying a fine because "statutes of limitations contained in the Code of Civil Procedure do not apply to administrative actions."
I. The Decision's Findings Explain Why We Penalized AT&T for its Illegal Conduct.
The rehearing application's final claim of error relies on section 1705. AT&T asserts that two of the Decision's findings do not sufficiently explain why we reached our ultimate conclusion. First, the rehearing application claims that Finding of Fact 7, which addresses numbering issues, is insufficient because the issue was of such importance to this proceeding that it merited more than one finding of fact. (Rehg. App. at p. 42.) In support of this claim, the rehearing application asserts that Finding of Fact 7 is in error because it does not agree with AT&T's claim that prior Commission decisions on numbering or the 2006 Activity Report demonstrate that it was providing warm in compliance with the statute. Such claims do not demonstrate error. However, we note that Finding of Fact 7 contains more than one specific holding. We will modify the Decision so it contains "separately stated" findings of fact on the issue of numbering. These modifications will also make our findings more specific, in order to better explain why the Decision concluded that generalized claims about numbering issues did not show that AT&T was providing warm line service "to the extent" that its technology or facilities permitted, or that numbering concerns precluded AT&T from providing both warm line service and service to subscribers of billed service.
Second, the rehearing application claims the holding that AT&T's conduct demonstrated a lack of good faith is not sufficiently supported by Finding of Fact 18. That finding correctly states that AT&T's contravention of the ex parte rules was indicative of a lack of good faith. (Rehg. App. at p. 42.) However, as discussed above, the Decision's discussion states several other reasons why we disapproved of AT&T's conduct. We will modify the Decision so this analysis is reflected in our findings of fact.
24 In the Decision, as in many complaint case decisions, we considered principles set out in the Evidence Code, and cases and other materials that elaborate on those principles. However, as the Decision makes clear, we looked to these legal resources for "appropriate guidance" in determining how to evaluate the record; we did not rely on these materials as controlling. (Decision at p. 7.)
25 Thus AT&T's claim that UCAN agrees with AT&T's contentions on the burden of proof are unavailing. (Rehg. App. at p. 4.)
26 The rehearing application is incorrect to assert that this approach is "a complete abandonment of Commission precedent and constitutes legal error" because the Decision does not refer prior Commission decisions. (Rehg. App. at p. 4.) The Decision's approach is derived from section 2883's requirements and facts particular to this case, such as the holding that "most of the information necessary to make such a showing [i.e, a showing about numbering concerns] is uniquely in AT&T's possession." (Decision at p. 7.) Further the decision relied upon by AT&T as establishing Commission precedent, ARCO Products Company v. SFPP, L.P. [D.98-08-033] (1998) 81 Cal.P.U.C.2d 573 is not authoritative. The Commission granted rehearing of that decision in ARCO Product Company et al. v. SFPP, L.P. [D.99-06-093] (1999) 1 Cal.P.U.C.3d 418. The decision granting rehearing held that fact-finders had discretion to allocate the burden of proof based on the particular facts of a case, citing some of the same authority that the Decision relied upon. (Id. at p. 424, quoting Webster v. Trustees of Cal. State Univ. (1993) 19 Cal.App.4th 1456, 1463, quoting Cal. Law Revision Com., 29B West's Ann. Evid. Code, foll. § 500 (1966 ed.), p. 431.) The decision granting rehearing also calls into question the standard of proof advanced by AT&T-that a defendant need only "cast doubt" on complainant's evidence in order to prevail. (AT&T Opening Brief at p. 2.) We stated that such a standard "exaggerate[s] the stringency of the burden Complainants must meet." (ARCO Product Company et al. v. SFPP, L.P. [D.99-06-093], supra, at p. 424.)
27 The Decision also found that material in the record showed that AT&T's warm line policies were, at least in part, driven by cost concerns. (Decision at p. 43.) Specifically, this material shows that AT&T's policy may have been prompted by the development of new technology that, for the first time, made it economically feasible to terminate warm line service for groups of residents rather than on an individual basis. (Exhibit 5, Attachment MJ-8.)
28 Notably, this case does not involve the entirety of AT&T's telephone network. The physical aspects of the network relevant to this case are those that connect a residence to AT&T's central office, not the more complex network connections that occur between the central office, AT&T's main network, and beyond.
29 The Commission's Rules of Practice and Procedure provide that it may take official notice of "such matters as may be judicially noticed by the courts of the State of California." (Rules of Practice and Procedure, Rule 13.9, Cal. Code Regs., tit. 20, § 13.9.) Those "matters" are listed in Evidence Code sections 451 and 452. Courts are required to take official notice of matters covered by Evidence Code section 451. Section 452 gives courts discretion to take judicial notice of certain matters, including, in subdivision (c), official acts of the executive branch of federal government.
30 UCAN did not dispute AT&T's request that the Commission accept the Form 502 utilization data itself, and the material was filed under seal. (Ruling Resolving Pending Motions at pp. 1-2.)
31 The Decision further points out that it based its decision to reject AT&T's appeal on the Commission's policy also of deferring to the judgment of the Presiding Officer in making evidentiary rulings. (Decision at pp. 48-49, 51.) Thus the rehearing application's claim that the Decision is in error because its explanation of the reasons for rejecting AT&T's appeal is "not ... sufficient" does not take into account the complete rationale we relied upon. (Rehg. App. At p. 38.)
32 The Decision did not respond to AT&T's claim in its appeal that the Form 502 utilization data met the requirements for official notice because it was likely to be accurate, presumably because that claim does not address the requirements of official notice under Evidence Code section 452, subdivision (c). (See Appeal of Presiding Officer's Decision at p. 34.)
33 For the sake of consistency we will also delete a reference to information contained in AT&T's Form 10-K, filed with the Securities and Exchange Commission, because AT&T appears to claim that rules of official notice must be applied with equal precision in all instances. AT&T did not object to our use of this material, or contest its accuracy, but the parties do not appear to have taken positions on whether or not this material was a proper subject for official notice. We have thus determined not to rely upon it. We considered this information in the course of determining that AT&T was financially capable of paying the penalty we imposed, and we can reach that conclusion by relying on other material.
34 A description of the regulatory framework for CLCs appears at footnote 36, above.
35 Since this order cites section 1701, subdivision (a)'s provisions allowing for "informality" in Commission proceedings, the rehearing application's decision to allege error by relying on citations to cases that do not disclose their subsequent history is accepted.
36 Under the regulatory scheme of the 1990s, resellers had no telephone facilities of their own and relied on services provided through an arrangement with an underlying "facilities based" carrier. By requiring warm line service to remain in effect as long as the reseller "has an arrangement for resale service to the end user's premises" the Commission ensured that a reseller's obligation to provide warm line service lasted as long as its relationship with the underlying carrier lasted, rather than only as long as its relationship with its customer lasted.
37 UCAN's Response to AT&T's Appeal of the Presiding Officer's decision reviews several other Commission decisions at pp. 20-27, including a decision that stated section 2883 required lines to be in place to provide warm line service "at all times." (Open Access to Bottleneck Services [D.96-08-021] (1996) 67 Cal.P.U.C.2d 221, 243.) It is also important to note that in most respects the statute's requirements are so straightforward they do not create the uncertainty that AT&T contends exists. (Cf., Decision at pp. 9, 13.) For example, AT&T is incorrect to assert that it could not have know that its 180-day policy contravened the statute because it received no guidance on "whether or not there is a time limit to the obligation to continue to provide warm dial tone." (Rehg. App. at p. 29.) Section 2883 contains a clear directive that warm line service must be provided and the language of the statute provides no indication that a carrier may place time limits on the provision of warm line service.
38 The rehearing application attempts to minimize the effect of the Commission's previous decisions by claiming that they are not specifically addressed to the issues presented in this case and therefore "cannot suffice." (Rehg. App. at pp. 28-29.) However the safe harbor theory that AT&T advances requires it to make an effort to "determine the correct meaning of the statute" and, specifically to avoid "opinions that provide creative but unlikely answers to `issues of first impression.'" (Reynolds v. Hartford Financial Services Group, Inc., supra, at p. 1099.) The claim that section 2883 was written in such a way that the very circumstances that would make it unnecessary to provide warm line service at a new residence are the factors that trigger the requirement to provide such service would likely fall into this category.
39 However, we note that the Decision referred to the March 1998 Letter as if it were written by the witness who provided the letter in an attachment to her testimony. We will modify the Decision to refer more clearly to this letter.
40 For example, section 2883 is not vague about the question of whether carriers can impose time limits on warm line service. As we explained above, the statute contains no language that suggests time limits are permissible, and our past decisions have both explicitly and implicitly held that the obligation to provide warm line service does not expire after a certain period of time.
41 For example, the question of numbering concerns does not involve interpretation of the statute. The Decision's holdings on that question are based on an evaluation of the record that found the generic material submitted by AT&T was insufficient to demonstrate that a limitation in technology or facilities required AT&T to adopt its warm line policy. (Decision at pp. 17-20.)
