V. SBC California's Failure to Comply with the ALJ's Ruling Regarding Customer Notice for Hearings

On October 14, 2003, the ALJ assigned to this proceeding held a conference call with SBC California and other parties for the limited purpose of scheduling the PPHs anticipated by the scoping memo. During the conference call, SBC California's attorney objected to the Commission's plan to conduct PPHs. The ALJ stated the assigned Commissioner intended to move ahead with PPHs, consistent with the scoping memo, and referred SBC California's attorney to his statement at the PHC that SBC California did not oppose PPHs. The ALJ informed SBC California's attorney that if SBC California sought a change to the scoping memo, the appropriate procedural course was for SBC California to file a motion. To date, SBC California has not filed a motion objecting to PPHs nor the issues identified in the scoping memo.

Subsequently, on November 7, 2003, the ALJ informed SBC California and the parties to this proceeding of the dates, times and locations for PPHs. SBC California had previously informed the ALJ that it needed the hearing information no later than November 10, 2003 in order to publish and mail notices to customers of the hearings. On November 25, 2003, and in response to an ALJ Ruling dated November 21, 2003, SBC California sent a letter to the Commission stating that it had not taken steps to notify customers of the PPHs, as required by the ALJ on November 7. SBC California's letter asserts that its decision not to notify its customers of the hearings "was entirely reasonable" given SBC California's "decision not to proceed with the Application." Prior to this communication ordered by the ALJ, SBC California did not seek permission to suspend its duty to notify customers of the hearings or even notify the Commission of its intent to suspend this duty.

Discussion

A utility may not ignore a ruling or order of the Commission on the basis that it has an outstanding and unresolved motion before the Commission. SBC California acted in contravention of an ALJ ruling when it failed to proceed to publish and mail notices to its customers regarding the PPHs. Its failure to publish and mail customer notices effectively made moot the Commission's decision to conduct such hearings because, absent adequate customer notice, the Commission would not expect customer attendance at the hearings. Its failure to follow the ALJ's directive in this case may have been both logical and reasonable from the standpoint of saving shareholder dollars and preventing the customer confusion that might have occurred had it gone forward with customer notices only to later receive a grant of its motion to withdraw. SBC California should have made these points in a motion seeking authority to suspend the ALJ's directive and the scoping memo in this regard rather than taking unilateral action in contravention of an ALJ's directive. We are confident that its motion would have been granted, assuming the circumstances are as we understand them.

In comments to the ALJ's draft decision in this case, SBC California argues that it did not violate a Commission directive when it failed to send customer notices of the PPHs by observing that it could have subsequently contacted its customers outside the normal billing cycle. It states it took the risk that it would have to incur the additional cost for a separate mailing when it let the November 10 date pass. This response incorrectly presumes that the ALJ's ruling provided SBC California a choice as to how it would notify its customers. Based on the representations of SBC California's attorney that the company required an approved customer notice by November 10 and discussions about the operation of SBC California's billing process, the ALJ directed SBC California to include the customer notice in bills issued during the normal billing cycle.

SBC California's decision to ignore an ALJ's ruling rather than seek relief from it is subject to fines authorized by §§ 2107 and 2108 and is tantamount to a violation of a Commission order. The Commission delegates authority to ALJs to conduct Commission proceedings and to take all procedural steps necessary to assure the fair and efficient management of those proceedings. (Rule 63.) If the Commission were to permit a party to ignore the authority of the ALJ, the integrity of our proceedings would quickly deteriorate and our decision-making responsibilities would be hopelessly compromised.

Finally, Rule 1 of the Commission's Rules of Practice and Procedure require that any person authorized to represent a party in Commission proceedings "to maintain the respect due to the Commission, members of the Commission and Administrative Law Judges." Even though its reluctance to needlessly mail out notices had a certain logic, SBC California demonstrated a lack of respect for the Commission, the Assigned Commissioner and the assigned ALJ in this proceeding when it ignored an ALJ's directive and the underlying authority for her directive, a scoping memo and ruling signed by the Assigned Commissioner. By its incivility and impertinence toward the Commission and its officers, SBC's counsel debased the decorum that serves as a condition precedent to rational adjudication. We fully recognize that in the heat of litigation, advocates are sometimes impelled toward behavior they later regret. Here, however, evidence of such penance is scant. Because the admonishment inherent in this decision suffices to express our distaste for SBC California's conduct, we decline to find a Rule 1 violation. Our act of forbearance should not be interpreted as a belief that such a finding is not amply supported by the evidence.

Section 2107 and Section 2108 authorize the Commission to fine an utility for its failure to comply with "any part of provision of any order, decision, decree, rule, direction, demand or requirement of the Commission..." We would be within our authority to fine SBC California for its failure to comply with the directive of the ALJ and the ruling of the assigned Commissioner. In this case, SBC California's conduct caused no harm to consumers, shareholders or any party. We therefore do not impose any monetary penalties here. We nevertheless emphasize the seriousness of that conduct in order to protect the integrity of the process and procedures under which we operate.