V. Comments on Draft Decision
The draft decision of the ALJ in this matter was mailed to the parties in accordance with Pub. Util. Code § 311(g)(1) and Rule 77.7 of the Rules of Practice and Procedure. Inflexion filed comments on April 15, 2004, and Verizon and SBC filed reply comments on April 20, 2004. On April 29, 2004, Inflexion also filed a "provisional request" for a hearing on its applications, asserting that the Commission cannot adopt the draft decision without hearings. Verizon opposed that request for hearing on May 14, 2004.
Inflexion claims that the Pennsylvania fine is irrelevant to its application here, and seeks a hearing at which to "presen[t] evidence of Messrs. Machen's and Goldsmith's recent successful, untroubled, and non-controversial operation of other multi-state telecommunications companies. . . ." Inflexion claims its due process rights require that it be granted this hearing.
Verizon opposes grant of a hearing and supports the draft decision. It claims that the undisputed record shows that Inflexion is not qualified to do business in California under the Commission's certification standard, pointing to the following undisputed facts:
· Two of Inflexion's founders, Dwayne Goldsmith and Keith Machen, were the former President and Vice-President/General Counsel, respectively, of Ntegrity Telecontent Services.
· In January 2003, the Pennsylvania Public Utility Commission fined Ntegrity $400,550 for slamming 27 local telephone customers and failing to provide that Commission's staff with information regarding 63 informal slamming complaints within the required time period.
· Goldsmith and Machen held their executive positions at Ntegrity during the time of Ntegrity's misconduct.
· Machen was directly involved in the discussions with the Pennsylvania Commission's staff regarding the slamming allegations.
· The Pennsylvania Commission scheduled a hearing on the matter in July 2002 but Ntegrity failed to appear.
· Ntegrity failed to pay the Pennsylvania fine.
In opposing Inflexion's provisional request for hearing, Verizon states that Inflexion has not cited material disputed facts that would justify an evidentiary hearing despite the ALJ's ruling requiring that Inflexion specifically identify the "material disputed facts that will be tested under cross examination."7
Inflexion's offer of evidence of "Messrs. Machen's and Goldsmith's successful and untroubled telecommunications operations for two years prior to founding Inflexion," does not warrant a hearing. Even if true, these asserted facts have no bearing on Messrs. Machen's and Goldsmith's actions in Pennsylvania, which are of recent vintage. Inflexion also makes numerous other factual assertions regarding Inflexion's management's history, but none of these asserted facts impact the factual bases of the draft decision. Thus, there remains no disputed issue of fact warranting a hearing.
"[D]ue process [does not] require a hearing that serves no useful purpose. In the instant case . . . [n]o facts are open to serious dispute, no witnesses' demeanor need be judged, no policy decisions on which public sentiment might prove useful are before the commission. Within such a context, ... a hearing serves no function."8 Indeed, Inflexion concedes that "[the Commission] may deny a request for hearing in cases where there are no material contested facts."9
The United States Supreme Court has repeatedly held that an applicant who seeks a hearing before an administrative body must "meet a threshold burden of tendering evidence."10 Due process does not require a hearing merely to "sharpen the issues" or "fully develop the facts"; rather, there must be disputed issues of material fact in order to merit a hearing.11 There are no such facts here.
Nor does the Public Utilities Code require that an evidentiary hearing be held in this matter. Section 1005(a) provides that the decision whether to hold a hearing is the Commission's, and that a hearing is required only if the applicant is "entitled" to one: "The commission may, with or without hearing, issue the certificate [of public convenience and necessity] as prayed for, or refuse to issue
it, ...; provided, however, upon timely application for a hearing by any person entitled to be heard thereat, the commission, before issuing or refusing to issue
the certificate, shall hold a hearing thereon." As discussed above, Inflexion is not "entitled" to a hearing because it has not shown any disputed facts material to the outcome of this case. Moreover, the Ninth Circuit has made it clear that administrative agencies may deny unsupported evidentiary-hearing requests: "an agency need not conduct a factual hearing if there are no factual questions to resolve."12
Several rulings of this Commission have taken the same approach as the ALJ did in her April 2 e-mail instructing Inflexion to support any evidentiary-hearing request by specifically identifying the "material disputed facts that will be tested under cross examination."13 For example, in one of its first local competition decisions, the Commission was faced with the question of whether to hold evidentiary hearings - as several parties had requested - regarding various implementation issues. The Commission concluded that "evidentiary hearings ... are warranted only to the extent there are material factual disputed issues," and that "[a]ny adopted evidentiary hearing ... shall be ... focused on resolving essential factual disputes."14
Another ALJ denied a party's motion for an evidentiary hearing on facts similar to those involved here. In that case, the scoping memorandum required that any party seeking a hearing state a justification for hearing, identify what the moving party would seek to demonstrate through hearing, and state whether the disputed facts were "adjudicative facts" or "legislative facts." The party's motion for an evidentiary hearing failed to provide this information, and instead, as here, merely made conclusory statements suggesting that due process required a hearing. The ALJ denied the hearing, ruling that the party
does not state with sufficient clarity what disputed fact ... would be the subject of hearing .... The motion does not state with adequate clarity the justification for hearing, what [the party] would seek to demonstrate through hearing, and whether disputed facts are "adjudicative facts" or "legislative facts." It is not clear what party would produce a witness if the motion is granted, or what party [the requested party] seeks to cross-examine.15
Inflexion here also appeals to vague notions of "due process" while ignoring the judge's instructions to support its evidentiary-hearing request by specifically identifying the "material disputed facts that will be tested under cross examination." The Commission therefore denies Inflexion's unsupported evidentiary-hearing request.
Inflexion has been afforded its due process, and this Commission need not conduct an evidentiary hearing. Nor can Inflexion use an evidentiary hearing in California to collaterally attack the findings of fact against Ntegrity in the recent Pennsylvania decision. That decision is final and considered res judicata.16 Ntegrity had an opportunity to be heard in that forum, but failed to appear at its own hearing. Ntegrity management, now at Inflexion, should not be given yet another opportunity to challenge the Pennsylvania findings.
Finally, Inflexion challenges the draft decision's discussion of the New Jersey investigation of Ntegrity, the Verizon-Ntegrity dispute in New Jersey, and the Verizon-Stickdog dispute in Virginia. As a threshold matter, the draft decision makes clear that denying Inflexion's applications would be appropriate based solely on the Pennsylvania Commission's actions against Inflexion: "the circumstances surrounding the fine, and the prior company's failure to pay the fine, make it impossible for us to satisfy ourselves that we would have sufficient ability to control Inflexion's behavior in California through our own ability to levy fines or otherwise require compliance with our rules."17
Moreover, Inflexion does not dispute the facts the draft decision recites regarding the other three matters. Rather, it simply alleges it should be allowed to introduce other information about these matters. However, the facts we recite, in combination with the undisputed facts surrounding the Pennsylvania fine, support our conclusion that Inflexion has not demonstrated that it is qualified at this time to provide telecommunications service in California.
The draft decision should not change.
7 See Comments of Inflexion California Communications Crop. On Draft Decision of Administrative Law Judge Sarah Thomas, filed April 15, 2004, at 14 n.1 (Inflexion Comments). 8 Los Angeles v. Public Utilities Com., 15 Cal. 3d 680, 703 (1975) (citation omitted). 9 Inflexion Comments at 13. 10 Costle v. Pacific Legal Foundation, 445 U.S. 198, 214 (1980), citing Weinberger v. Hynson et al., 412 U.S. 609, 620-21 (1973). 11 Georgia-Pacific Corporation v. United States Environmental Protection Agency, 671 F.2d 1235, 1241 (9th Cir. 1982). 12 Air North America v. DOT, 937 F.2d 1427, 1433-34 (9th Cir. 1991). 13 See, e.g., ALJ's Ruling on Motion for Hearing, R.00-10-002, dated Feb. 20, 2001, at p. 2; ALJ's Ruling Setting Aside Submission and Taking Further Evidence Regarding Executive Compensation and Bonuses, A.02-01-107/I.03-01-012/A.02-09-005, dated Feb. 3, 2004, at p. 6; Ruling of Assigned Commissioner and ALJ Regarding Motion for Clarification and Amendment of Procedural Schedule, A.99-09-053, dated Feb. 28, 2000, at p. 3. 14 D.95-07-054, mimeo., at pp. 21, 29. 15 Administrative Law Judge's Ruling on Motion for Hearing, R.00-10-002, dated Feb. 20, 2001, at pp. 2-3. 16 See, e.g., D.03-04-038, mimeo., at p. 10 ("Res judicata precludes the relitigation of a final judgment on the merits between the same parties or parties in privity with them. [Citation omitted.] It is applied to promote judicial and administrative economy, bring finality to adjudicated issues, and prevent wasteful multiple litigation.") 17 Draft Decision at 2.
