II. Background

A. Public Utilities Code § 625¹

Because § 625 has been recently enacted, this is the first case brought before the Commission where a public utility invokes this statute in order to condemn utility easements to offer a competitive service. Pub. Util. Code § 625(a)(1)(A) provides, in relevant part, that "a public utility that offers competitive services may not condemn any property for the purpose of competing with another entity in the offering of those competitive services, unless the commission finds that such an action would serve the public interest, pursuant to a petition or complaint filed by the public utility..." Where such a complaint is filed, the Commission will conduct an adjudication hearing in accordance with § 1701 et seq., "including an opportunity for the public to participate." Section 625(e) further states that a public utility that does not comply with this section may not exercise the power of eminent domain (i.e., it may not condemn property).

According to § 625 (b)(2)², the Commission may make a finding that the proposed condemnation is in the public interest if the public utility is able to show all of the following with regard to the proposed condemnation:

1. the public interest and necessity require the proposed project;

2. the property to be condemned is necessary for the proposed project;

3. the public benefit of acquiring the property by eminent domain outweighs the hardship to the owners of the property;

4. the proposed project is located in a manner most compatible with the greatest public good and least private injury.

In Decision (D.) 00-05-048, a decision conditionally granting Lodi Gas Storage authority to build and operate a gas storage facility, we stated that the Commission has discretion over whether or not to permit a complainant to exercise the power of eminent domain, even if complainant makes the requisite showing under § 625.

"Also, we note that the language of § 625 gives the Commission the discretion to permit a complainant to exercise the power of eminent domain if it meets its burden of proof as to certain issues. Section 625 (b) states that the "commission may make a finding pursuant to subdivision (a) if, in the determination of the commission, either of the following conditions are met..." (Emphasis added.) We interpret § 625 to mean what it says, namely, that the Commission has the discretion whether or not to permit a complainant to exercise the power of eminent domain. Furthermore, the Commission is not required to authorize the use of eminent domain where the complainant makes one of the alternate showings." (D.00-05-048 at p. 62.)

Section 625 (a)(2)(A) provides that the Commission shall conduct the hearing in the local jurisdiction that would be affected by the proposed condemnation. The statute requires that the hearing commence within 45 days after the complaint is filed, unless the respondent establishes that an extension of not more than 30 days is necessary for discovery or other hearing preparation.

B. Procedural Background

On May 19, 2000, Cox filed the above-captioned complaint. An exact description of the property interest Cox seeks to acquire was not clearly set forth in the complaint. However, at various places in the complaint, Cox referred to the property interest as "easements," "easements across a parcel that includes buildings located at 3333-3355 Michelson Drive, Irvine, County of Orange, California," and "easements within existing utility easements across the property owned by defendant." (See Form Complaint, pp. 4 and 5;³ see also the discussion below, where Cox's description of what it seeks to condemn is discussed in more detail.)

On May 25, 2000, Assigned Commissioner Duque and Chief Administrative Law Judge (ALJ) Carew issued a ruling on, among other things, the issues to be considered,⁴ and the designation of ALJ Econome as the presiding officer.

On June 6, the ALJ issued a ruling directing complainant, and permitting others, to address additional issues in the written testimony to be served prior to the hearing. The issues are as follows:

1. Describe the location of the easements sought to be condemned, including a map (plat) showing both the easements sought to be condemned, the dimensions of the easements (i.e., length, depth, etc.), and other existing easements, buildings on the land, etc.

2. Provide a legal description of the property sought to be condemned (a metes and bounds description).

3. Set forth the total capacity of the existing easement, the capacity currently being used, and the capacity sought to be condemned.

4. Identify all persons who own or have legal access to the property sought to be condemned. Include title report or other means by which the Commission can determine persons affected by proposed condemnation.

On June 19, defendant Crow Development requested an extension of time for the hearing and submission of written testimony. A June 21 ALJ ruling stated that the prehearing conference would be held on July 3 as previously scheduled, and the hearing would also commence to, among other things, take public comment and hear oral argument on some outstanding motions. The ruling further stated that at the hearing, or thereafter, the Commission could determine the dates for continued evidentiary hearings, if appropriate, as well as appropriate dates for serving written direct and reply testimony.⁵

On June 20, 2000, Crow Development filed a motion to stay this proceeding, which motion Cox opposes.

On July 3, 2000, within 45 days after the complaint was filed, the ALJ commenced a hearing pursuant to Pub. Util. Code § 625 (a)(2)(A). At that hearing, the ALJ addressed procedural matters and heard public comment from one individual, Henry Oh, who represents Jamboree L.L.C. (Jamboree), the owner of the office located on the facility parcel which is described more fully below. Oh expressed his client's support for Cox's complaint because Jamboree is involved in a longstanding legal dispute with Crow Development involving, among other things, Jamboree's tenants' access to competitive telecommunications services.

Counsel for Cox also stated that the State of California Department of Transportation (Caltrans) had authorized her to make a brief public comment on its behalf, and requested that the Commission take official notice of Caltrans' concerns as set forth in the Hecker declaration filed with this Commission in a related case, Case (C.) 00-05-023.⁶ At the hearing, the ALJ outlined additional questions to be briefed in light of the fact that both parties are simultaneously litigating multiple complex issues in multiple fora regarding the same underlying dispute. The ALJ voiced concern that the potential for inconsistent results existed if these cases were litigated concurrently. At the end of the first day of hearing on July 3, the ALJ stated that the hearing may be continued to a time and date further ordered by the Commission. Because this decision finds that further hearings are not necessary, the July 3 hearing concludes the hearing record.

The parties served opening comments on the supplemental briefing requested by the ALJ on July 17, and reply comments by August 1, 2000.⁷ This draft decision is timely issued in this case pursuant to § 625 (a)(3)(A) which requires a decision within 45 days of the conclusion of the hearing, unless further briefing is ordered, in which event this period may be extended for an additional 30 days. Because the briefing took an additional 29 days, the last day for the ALJ to issue the draft decision is September 15, 2000.

C. Other Administrative and Court Actions

1. Jamboree Superior Court Action

a. Relationship Between Crow Development and Jamboree

In March 1999, Jamboree commenced a state court action against, inter alia, Crow Development.⁸ According to a First Amended Complaint filed in that action on January 18, 2000,⁹ in 1985, two partnerships, Crow Winthrop Operating Partnership (Winthrop Operating) and Crow Development, each acquired separate portions of land and office space located at Park Place. Winthrop Operating acquired Park Place's then-existing office buildings, called Fluor World Corporation Headquarters Facility, and underlying land (the facility parcel.) Crow Development owned and still owns a majority of the 90 acres of land which surrounds the facility parcel (development parcel).

Also in 1985, Crow Development and Winthrop Operating entered into an agreement entitled "Construction, Operation and Reciprocal Easement Agreement" dated July 26, 1985 (Reciprocal Easement Agreement).

In April 1996, Winthrop Operating defaulted on its loan. As a result of Winthrop Operating's plan of reorganization confirmed by a bankruptcy court, a newly created company, Jamboree, became the new owner of the facility parcel.

b. Allegations in Jamboree Superior Court Action

Jamboree's First Amended Complaint alleges seven causes of action against Crow Development.¹⁰ Among other things, Jamboree complains of Crow Development's interference with Jamboree's utility easements. Jamboree alleges, in relevant part, that Crow Development is interfering with Jamboree's ability to access its easements as provided in the Reciprocal Easement Agreement, and such interference prevents providers such as CoxCom, Inc. dba Cox Communications of Orange County (CoxCom) and Cox from providing cable and telephone service to the facility parcel. Jamboree seeks a declaration that it be allowed full and complete access to its utility easements, which in turn would give CoxCom and Cox certain access to the easements. Crow Development's motion for official notice attaches copies of the voluminous discovery (many deposition transcripts, etc.) that has occurred in this case.

2. Cox Superior Court Action

On May 17, 2000, Cox and CoxCom filed a complaint against Crow Development in Orange County Superior Court for declaratory and injunctive relief. Cox and CoxCom seek a declaration, in relevant part, that (a) CoxCom has both express and implied, affirmative and proscriptive, easements (through the Reciprocal Easement Agreement and otherwise) across Crow Development's property to install and maintain its cable system, over which cable television, high-speed internet access and telephone services are provided to Park Place customers, and (b) Cox and CoxCom are entitled to the continued use of these easements without interference from Crow Development. Cox and CoxCom also seek to enjoin Crow Development from denying CoxCom access to its cable distribution system on Crow Development's property and from interfering with CoxCom's operation and maintenance of this cable system.

Crow Development has filed a cross-complaint against Cox and CoxCom in the Cox Superior Court Action for trespass, ejectment, injunctive relief, declaratory relief, and restitution for violations of California Business and Professions Code § 17200. The Cox Superior Court Action has been transferred to the same judge as the Jamboree Superior Court Action.

The Superior Court has ruled on Cox and CoxCom's motion for preliminary injunction, granting it only to the extent that CoxCom may continue to maintain and repair the cable facilities pending a decision on the merits of the case. The court declined to grant a broader preliminary injunction, in part, because plaintiffs failed to show that they will prevail on the merits as to any claimed easement rights by virtue of Jamboree's rights or public utility rights. The court also indicated it would consider granting a motion for a limited stay of the Cox Superior Court Action because of the pending action between Crow Development and Jamboree. The court has not rendered a final decision on the merits of the Cox Superior Court Case, nor has Cox or CoxCom dismissed this case or any of the asserted claims in light of the Superior Court's ruling on the preliminary injunction.

3. C.00-05-023 (Related Commission Complaint)

On the same day that Cox filed the instant case, Cox, CoxCom, and Caltrans also filed a complaint against Crow Development and Pacific Bell (Pacific) at this Commission. The complaint, of which we take official notice, alleges that Crow Development has denied Cox and CoxCom access to the existing facilities and easements on Crow Development's property because Crow Development and Jamboree are engaged in a dispute over further construction and use of Park Place. Complainants also allege that Jamboree has requested that Crow Development grant Cox an easement (to the extent one does not already exist) to allow Cox to provide local exchange service to the tenants located on the facility parcel.

Cox, CoxCom, and Caltrans allege that Crow Development manages and controls telephone lines for compensation, and consequently that Crow Development is operating as a public utility without Commission authorization, and is also discriminating against Cox because Crow Development is denying easement access to Cox, while permitting Pacific access to the utility easements to offer telephone service. Complainants also allege that Pacific has violated both D.98-10-058, the Commission's Rights-of-Way Decision, in that Pacific has an arrangement with Crow Development that has the effect of restricting Cox's access to the property, and § 626, because Pacific has an affirmative duty to prevent property owners from limiting other carriers' access to their properties.

Complainants have filed a motion for temporary restraining order and preliminary injunction together with C.00-05-023. They request the Commission to require Crow Development to cease (1) operating as a public utility without Commission authorization, and (2) denying Cox access to existing utility easements at Park Place. Complainants allege that they have suffered harm in that Crow Development is interfering both with Cox and CoxCom's ability to provide cable and telephone service, and with Caltrans fully deploying its transportation management system located on the facility parcel.

Crow Development and Pacific move to dismiss C.00-05-023. Crow Development principally argues that the Commission lacks jurisdiction over Crow Development because it is not a public utility. Pacific also believes it does not have an easement over Crow Development's property and is only present on the property by license. The disposition of these matters and the necessity for and schedule of further proceedings in C.00-05-023 will be addressed separately in that proceeding.