4. Substantial Contribution
UCAN states that its efforts and related substantial contributions fall within three broad areas: appellate work (2005 through 2006); opposition to Cingular's initial Restitution Plan (in early 2005); and participation in settlement negotiations (late 2006 through early 2007). UCAN retained the law firm of Rosner & Mansfield to assist it with the appeals and to develop a restitution model. Michael Shames, UCAN's Executive Director, also assisted with the appeals process and the negotiation of the settlement.
We examine each of these broad issue groups below. The second and third of these, where work was done within the umbrella of the Commission investigation itself, require what is now largely a standardized review for compliance with the statutory provisions governing assessment of substantial contribution. Appellate review, however, falls within an area where guidance in interpreting relevant statutes is evolving still.
In performing our review, we have relied largely upon the parties pleadings. We note that Cingular's opposition included, as attachments, the following documents from the judicial proceedings: UCAN's appellate brief; the Commission's appellate brief; a print-out of the docket entries from both the Court of Appeal and the California supreme Court; and UCAN's letter urging the Court to deny review. These were all helpful to us. Such documents, and any transcripts, should be a standard part of any request for compensation for work preformed in the course of judicial review. They enable the Commission to engage in an objective review of the appellate record. Here no transcripts were available, but we obtained directly from the Court of Appeal an audio CD of the oral argument held on May 16, 2006. We direct the ALJ to have a copy of the CD placed in the formal file for this proceeding.
4.1. Appellate Work
As noted above in Section 2, § 1802(a) permits compensation for the fees and costs "of obtaining judicial review." We begin by summarizing legal precedent on substantial contribution to the judicial review process.
In Southern California Edison v. Public Utilities Commission, supra, the California Court of Appeal held that an intervenor that successfully defends a Commission decision is eligible for intervenor compensation. (117 Cal.App.4th at 1046.) The court also opined that "the Legislature specifically provided for compensation to customers, even if their efforts may duplicate to some extent those of the PUC." (Id. at 1052, citing § 1802.5.) The Commission itself has noted that the legislative mandates within the intervenor compensation statutes "encourage effective intervenor participation" in defending a Commission's decision through judicial review. (D.03-04-034 at 10, citing § 1801.3(b).) Likewise: "The intervenor may join the Commission in opposing the appeal of another party that threatens to overturn the decision regarding positions or recommendations of the intervenor that the decision had adopted." (D.05-04-049 at 9.)
D.05-09-011 further advises:
[T]he work related to appellate review before the Court of Appeal can be compensated as long as there is a sufficient nexus between that work and the substantial contribution made in the Commission decision for which compensation is sought. Specifically, under governing Commission and judicial precedents, the work in the reviewing court must be related to or necessary for the substantial contribution. (D.05-09-011 at 12-13, emphasis in original.)
D.05-09-011, citing examples where previous intervenors were compensated for participating in judicial review, notes that "[t]he common thread among these decisions is that in order for the judicial forum work to be compensable, the work must be related to or necessary for the intervenor's substantial contribution for which compensation is sought. (Id. at 14; see
D.03-04-034 at 5; D.05-01-059 at 9-10; D.05-04-049 at 9-11; 117 Cal.App.4th at 1052, 1053.)
UCAN claims that it participated actively and substantially in the appellate proceedings and that such participation was necessary to defend its success in the Commission investigation which led to D.04-09-062. UCAN's Request, at page 5, describes how UCAN helped to obtain affirmation of the Commission's decision - by preparing its own response to the writ petition; by taking a major role in gathering and presenting evidence for the hearing, which was set before a special master, on whether the writ was filed in the proper venue; by submitting an index of selected exhibits from the Commission's hearing to assist the court in reviewing the full record; by participating at oral argument before the appellate panel, where UCAN explained why the ETFs were not a rate for preemption purposes (one of the main points in the court's denial of Cingular's petition); and by sending letters to the California Supreme Court to urge the Court not to entertain review of, modify, or depublish the opinion of the Court of Appeal.
Cingular vigorously opposes UCAN's request for any compensation for its appellate work. Cingular claims that UCAN's presentation added nothing to the arguments and positions presented by the Commission and, consequently, did not substantially contribute to the court's decision. We disagree. Below, we comment upon Cingular's primary criticisms, and conclude that Cingular's criticisms are invalid in all respects but one.
Cingular contends that UCAN's analysis was adequately briefed by the Commission's attorneys and mirrors their work. We do not question the competence of Commission staff to represent us adequately in the courts; nonetheless, it is an overstatement to say that UCAN's analysis was identical or that it provided no supplemental benefit at all. We recognize, for example, that the briefs filed by UCAN and the Commission both focus on the Spielholz.3 However, Spielholz is a primary case on the limitations on the scope of federal preemption of cellular rate regulation and it is highly unlikely that anyone filing briefs in response to Cingular's writ petition would not have discussed Spielholz. We note that a subsequent appellate court decision, Pacific Bell Wireless v. PUC., devotes several pages to Spielholz. (See 140 Cal.App.4th 718, 733-35 (2006).)
It is also true that in one particular instance where UCAN took a different approach than the Commission to distinguishing contrary federal authority, the Court of Appeal's decision cites the Commission's analysis.4 The court does not criticize or disavow UCAN's analysis, however. Even if a position advanced by an intervenor does not prevail, that party can still be rewarded intervenor compensation if its contributions were relevant and useful. (See, D.07-05-043 at 8, D.07-05-012 at 7, D.06-10-018 at 10, D.06-11-010 at 11.) Here, where UCAN did not "lose," we see no basis to conclude that UCAN's analysis did not supplement the legal analysis in a productive way.
Another briefing issue Cingular points to concerns the standard of review an appellate court must apply when reviewing a Commission decision. UCAN argued for Chevron-like deference for the Commission's decision.5 While the court declined to apply that standard, the court did agree with UCAN that Yamaha was part of the standard of review.6 UCAN made a substantial contribution towards this aspect of the case and should be compensated for its efforts.
We do agree with Cingular's opposition to UCAN's request to be compensated for the special index of "key evidence" that it put together to aid the Court of Appeal in understanding the evidence. (UCAN Request at 5.) Cingular objects to this index as a one-sided evaluation of the evidence. We need not make our own assessment since, in footnote 1 of its opinion, the court states explicitly that it did not use the index in reaching its decision. We find that the unsolicited index was an unproductive document that made no substantial contribution to the court's decision and we decline to award compensation for time spent preparing it.
We turn, next, to the parties' heavily contested venue dispute. Ultimately the court decided this issue against UCAN and the Commission. Cingular argues that because the special master assigned to hear the venue dispute rejected the position advanced by UCAN (and the Commission), the time UCAN spent preparing for and participating in the venue hearing should not be compensated. However, as discussed previously above, the Commission has discretion to authorize compensation if the intervenor did not prevail as long as the intervenor's contributions were relevant and useful. The venue challenge was a serious dispute, and not some arbitrary, procedural stratagem. UCAN took the lead in developing the venue challenge, including production of a sizeable body of evidence. We find that UCAN's participation in the venue hearing was substantial, relevant and useful.
UCAN also participated in oral argument before the appellate panel, where it supplemented the Commission's presentation. UCAN expounded upon the nature of ETFs and was able to help the court understand the reasoning behind the idea that ETFs should not be considered a rate for preemption purposes. This was a major point at issue in the appeal.
Subsequently, when Cingular attempted to have the opinion of the Court of Appeal reviewed by the California Supreme Court, and also sought to have the opinion depublished, both UCAN and the Commission sent letters in opposition. Expressing such views by letter (as opposed to a lengthier pleading) is standard practice. As the Supreme Court both denied review and declined to depublish, UCAN (and the Commission) prevailed. We conclude that UCAN made a substantial contribution towards resisting the review or depublication of the appellate court's opinion.
4.2. Restitution Plan
D.04-09-062 ordered Cingular to develop a Restitution Plan that would compensate those who were adversely affected by Cingular's ETF policy. UCAN and CPSD both objected to the initial Restitution Plan Cingular proposed, and they characterized it as being inadequate for a number of different reasons. UCAN's consumer advocacy and its efforts to develop a mechanism to ensure fair and comprehensive restitution ultimately led to the all-party settlement that addressed all of these concerns without requiring further Commission intervention. We find that UCAN's participation in this area made a substantial contribution to D.07-03-048 and we grant, in full, this portion of its compensation request.
4.3. Settlement
The all-party settlement approved by D.07-03-048 on March 15, 2007, resolved all of the remaining differences between the parties. It is very similar to the original penalty and reparation order adopted by D.04-09-062, though it adds the details for implementing reparations. The parties engaged in settlement negotiations over a nine-month period prior to the 2007 decision. We include a brief chronology to aid the subsequent discussion. In November 2006, UCAN and Cingular presented CPSD with a proposed agreement that would have reduced the fine and included a payment to the California Consumer Protection Foundation to be used for cy pres purposes. This settlement was rejected by CPSD as reducing the penalty to a de minimus amount. The parties abandoned a later version of the settlement in January 2007, when it became apparent that the Commission would not approve its terms. Thereafter the parties entered into the all-party settlement adopted by D.07-03-048.
Cingular opposes UCAN's request for compensation for work performed during the settlement process because much of UCAN's effort went to the settlement abandoned in January 2007. Cingular claims that UCAN's participation was not needed during the negotiations that led to the adopted all-party settlement.
We find that UCAN was a substantial and material participant in the settlement negotiations and actively engaged in each of the settlements that eventually led to the adopted, all-party settlement. Though Cingular claims that in December 2006 settlement discussions "UCAN was deliberately excluded on grounds that its participation was not needed and its involvement unwanted," Cingular provides no support for that contention. (Cingular Opposition at 13.) To the contrary, some of the e-mail selections UCAN has attached to its reply show that Cingular's counsel actively sought UCAN's involvement at several stages during the negotiations. Furthermore, whether or not UCAN participated in each and every settlement discussion, UCAN's position on implementation of numerous reparation issues carried over across successive settlement efforts and influenced the final, all-party settlement. The Supplemental Declaration of Alan Mansfield, of Rosner & Mansfield, relates that Mansfield contacted Commission staff in an effort to obtain confirmation of UCAN's contribution to the settlement process. Mansfield reports that the Commission's General Counsel "indicated to me that he believes UCAN made an important contribution to the final settlement agreement." (Amendment to Reply, Supplemental Mansfield Declaration at Paragraph 3.) The Commission may consider representations like this one that would be barred by strict application of the evidentiary rules against admission of hearsay.7 Neither Commission staff nor Cingular has sought to challenge Mansfield's statement.
Thus, we disregard Cingular's argument that UCAN should receive no compensation for its efforts culminating in the settlement abandoned in January 2007, without Commission decision. Commission precedent clearly provides that compensation may be available for activity that did not result in a decision on the merits. (See authority cited in D.06-10-007 at 10, footnote 10.) We see no reason to deny UCAN compensation for this part of its request, particularly when the Commission later adopted the all-party settlement which replaced the abandoned settlement.
4.4. Contributions of Other Parties
Section 1801.3(f) requires an intervenor to avoid unnecessary participation that duplicates that of similar interests otherwise adequately represented by another party, or unnecessary for a fair determination of the proceeding. Section 1802.5, however, allows an intervenor to be eligible for full compensation if its participation materially supplements, complements, or contributes to that of another party if that participation makes a substantial contribution to the commission order.
Regarding contributions by other parties, we agree with UCAN that because there were only two parties to the complaint, UCAN and the Commission, many of the duplication concerns from other multi-party cases were not present. UCAN was in regular contact with the Commission (as evidenced by the time logs of near constant communications) to ensure that duplication of effort was minimized. UCAN's close working relationship with the Commission assured, generally, a productive use of time and resources.
3 See Spielholz v. Superior Court, 86 Cal. App. 4th 1366 (2001) [petitioners' claims for damages did not directly challenge a provider's rates but ought to compensate petitioners for provider's alleged false advertising, and any effect on such rates was merely incidental].
4 We refer to discussion of Bastien v. AT&T Wireless, 205 F.3d 983 (7th Cir. 2000) [held that plaintiff's complaint did not raise consumer protection issues, but challenged defendant's rates and right to enter the market on the terms specified by the Federal Communications Commission]. UCAN's analysis of Bastien relied upon Fedor v. Cingular, 355 F.3d 1069 (7th Cir. 2004), whereas we relied upon In re Wireless Consumers Alliance (2000) 15 F.C.C.R. 17021.
5 See Chevron USA v. Natural Resources Defense Council, 467 U.S. 837 (1984) [a reviewing court determines (1) whether a statute permits or forbids an agency's interpretation, and (2) if a statute is not clear on step (1), then decides whether the agency's statutory interpretation is reasonable or permissible; if an agency's interpretation is reasonable, the court will defer to the agency's reading of the statute].
6 See Yamaha Corporation v. State Board of Equalization, 19 Cal.4th 1 (1998) [the reviewing court exercises its independent judgment in reviewing an agency's interpretation of law, giving deference to the determination of the agency appropriate to the circumstances of the agency's action].
7 Rule 13.6(a) of the Commission's Rules of Practice and Procedure provides that "the technical rules of evidence ordinarily need not be applied" but requires that deviations not impede preservation of the "substantial rights of the parties."
