B. Discussion

Where the parties to a proceeding settle all disputed issues, the Commission applies the criteria set forth in Rule 12.1(d) of our Rules of Practice and Procedure to evaluate the proposed settlement. This rule requires that the settlement be "reasonable in light of the whole record, consistent with law, and in the public interest."

Before analyzing whether the settlement here meets these criteria, we note that the Commission's decisions express a strong policy favoring the settlement of disputes if a settlement is fair and reasonable in light of the whole record. (See e.g., D.88-12-083 (30 CPUC 2d 189, 221-223); D.91-05-029 (40 CPUC 2d 301, 326); D.05-03-022, mimeo., at 8.) The policy favoring settlements supports many worthwhile goals, including the reduction of litigation expense, the conservation of scarce Commission resources, and the reduction of risk to the parties that litigation will produce unacceptable results. (See, D.92-07-076, 45 CPUC2d 158, 166; D.92-12-019, 46 CPUC 2d 538, 553.)

With these policies in mind, we turn to the question of whether the settlement proposed here satisfies the criteria set forth in Rule 12.1(d).

As indicated by the lengthy procedural history set forth above, this has been a protracted and hard-fought case, even though no hearings have been held. The parties have presented in detail their arguments about legal issues including (1) whether the advice letter process used to convert the CPCN granted in D.93-10-018 into facilities-based resale authority carried with it any authority to construct facilities, and (2) whether the passage of time since issuance of the OII compels dismissal of the proceeding under the doctrine of administrative laches. In addition, Qwest in 2004 raised the issue whether the Commission has jurisdiction over the construction of Qwest's fiber optic backbone, or whether such jurisdiction is preempted under 47 U.S.C. § 214.

In addition to the legal issues, the parties have conducted extensive discovery on the factual question of whether any damage occurred to the cultural resources identified by the parties in Santa Clara and San Luis Obispo Counties. Consultants retained by Qwest and CPSD have each prepared reports and given depositions on these questions. Under these circumstances, the settling parties appear to have as full an understanding of what the ALJ termed the "damage" issue as is possible without hearings. It is also evident that resolving these issues through hearings would be unusually time-consuming.

In view of the complexity of the legal and factual issues, the terms of the settlement are reasonable. Qwest has agreed to (1) pay $150,000 to the General Fund, (2) distribute another $30,000 among three groups that promote awareness of Native American history and culture, (3) train its own employees and those of its contractors in the requirements of the cultural resource protocols that Qwest accepted in February 2000, and (4) continue abiding by the requirements of these protocols. These terms are consistent with the statement in the OII that one of the purposes of the proceeding was to "examine what orders may be appropriate and reasonable for the Commission to enter in order to remediate for past and to prevent future violations in connection with design and construction activity by Qwest in California . . ." (OII, p. 4.)

The second requirement for approving a settlement under Rule 12.1(d) is that it be consistent with law. We have no difficulty in concluding that this requirement is satisfied here.

As noted throughout this proceeding, two of the overarching issues have been whether the requirements of CEQA were met, as well as the requirements of the CPCNs held by Qwest. On these questions, the motion for adoption of the settlement agreement points out:

"[T]he Parties firmly believe that the terms of this settlement are consistent with the Commission's requirements. Notably, Qwest is bound by the Settlement Agreement to comply with the Protocols which were drafted in accordance with the California Environmental Quality Act . . . In addition, the Commission's Energy Division acknowledged in its February 17, 2000 letter releasing Qwest from the December 16, 1999 Stop Work notice which preceded this OII, that the Protocols are consistent with the terms of Qwest's CPCN [granted in D.97-09-11.]" (Joint Motion for Approval of Settlement Agreement, p. 5; citation omitted.)

Qwest's express agreement in the settlement to continue abiding by the cultural resource protocols, coupled with its agreement to report future construction projects as required by the Negative Declaration appended to D.97-09-110, is clearly consistent with CEQA principles, and thus satisfies the requirement that the proposed settlement be consistent with law.

As is clear from the history of the proceeding, this has been a hard-fought case, and resolving the issues it has raised through litigation would require a great deal more effort. CPSD and Qwest are surely correct when they state in their motion for adoption:

"Should the proceeding continue to a full evidentiary hearing on the merits, both parties would need to invest considerable additional time and resources, and the issues raised in I.00-03-001 would not likely be resolved at the Commission level for many more months. In addition, it is possible that one or more of the [p]arties will be dissatisfied with the decision after hearings, and the possibility exists that the litigation would continue on application for rehearing and/or petition for judicial review." (Id.)

Since one of the main reasons behind the policy favoring settlements is to avoid the expense and uncertainty of litigation, we agree with Qwest and CPSD that this settlement is in the public interest, notwithstanding the relatively modest sums Qwest has agreed to pay.

In reaching this conclusion, we recognize that although the Salinan Nation does not oppose the settlement, it has not joined in it and is clearly disappointed with the result. We infer from comments made by the Salinans' representative at a PHC that one of the reasons for this disappointment is that the Salinans were hoping for a statewide investigation of Qwest's

construction activities and the cultural impacts thereof.16 However, we also infer from the consulting archaeologists' sharply differing views over the impacts in Santa Clara and San Luis Obispo Counties that a statewide investigation would be enormously expensive for all parties, and so time-consuming that the issues it raised would likely not be resolved for many years. In our judgment, the public interest is better served by terminating this proceeding now with modest payments and Qwest's agreement to abide by the cultural resource protocols and report on future construction plans, rather than by litigating the statewide impacts of construction undertaken nearly a decade ago.

16 For example, after the ALJ asked at the October 8, 2003 PHC whether the OII wasn't concerned mainly with the impacts of construction in Santa Clara and San Luis Obispo Counties, the Salinan representative responded that he thought Monterey was included, and the following colloquy ensued:

"ALJ MCKENZIE: But it's those two principal areas[?]

"MR. CASTRO: No, I wouldn't say so. That was what - part of the scope would have discovered. I would believe there's archaeological sites all along that line throughout California.

"There was a reason the railroad was put where it was, because those are - the type of terrain it traversed was areas that a lot of the Native American ancestors put their village sites.

"So it's inevitable that they would go through multiple sites. That was one reason long ago the Legislature created - enacted laws like CEQA to protect those sites, because in certain areas it's almost inevitable that [there's] going to be a conflict there between construction and preservation.

"So I'm only - more aware of the sites in our homeland, which is Monterey and San Luis Obispo County, but I'm certain that's - the same issue applies to everywhere along the Southern Pacific Railroad tracks where they did construction." (PHC Tr. at 97-98.)

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