3. Requirements for Awards from ATF
The rules governing administration of the ATF and the criteria for granting awards from the ATF are set forth in the "Declaration of Trust" (Declaration) dated October 11, 1982. Prior to execution, this document was approved by the Commission in D.82-05-009 and D.82-08-059. The language of the executed Declaration was subsequently modified in D.92-03-090.
The Declaration, Section 1.2, provides that the ATF is created to defray expenses related to litigation of consumer interests in "quasi-judicial complaint cases." The complaint brought by Florsheim falls within this category. Because this threshold requirement is met, the UDI Request will be evaluated to determine if it meets the criteria for an award.
The criteria to be considered in determining eligibility for an award are set forth in the Declaration, Sections 1.3 and 1.4. Section 1.3 provides that an award may be granted only where the private party has made a "direct, primary, and substantial contribution" to the result of the case. Fees will be awarded where (1) complainants have generated a common fund that is not adequate to meet reasonable attorney or expert witness fees; (2) a substantial benefit has been conferred upon a party or members of an ascertainable class, but no means are available for charging those benefited with the cost of obtaining the benefit; or (3) where complainants have acted as private attorney general in vindicating an important principle of statutory or constitutional law, but no other means or fund is available for award of fees.
Section 1.4 provides an award will be based upon consideration of four factors: (1) the societal importance of the public policy vindicated; (2) the necessity for private enforcement and the magnitude of the burden on the complainant; (3) the number of people standing to benefit from the decision; and (4) the magnitude of the party's own economic interest in the litigation. Fee recovery is allowed even if a party has an economic interest in the proceeding if the Commission finds good cause for an award.
3.1 Contribution to Resolution of Case
The Declaration, Section 1.3, provides that attorneys fees may be awarded only where it is clearly and convincingly demonstrated that the private party has made a direct, primary, and substantial contribution to the result of the case. In its Request, UDI points to the Commission's discussion in D.98-09-058 as evidence of UDI's contribution. Upon review of the decision, we concur with UDI that the participation of UDI made a direct, primary, and substantial contribution to the decision. As a company that provides design services to developers of residential subdivisions, UDI was able to provide valuable technical information to the Commission regarding design, construction, and costing of joint trenches, and their ownership and operation after construction. UDI provided information that was not otherwise readily available to the Commission, and also was able to confirm information presented by the complainant. Information provided by UDI is summarized in D.98-09-058, pp. 5-6.
UDI argued that PG&E decided, as of July 1, 1995, that the gas portion of the trench has a "zero" value and allocated the gas occupancy percentage to the electric portion of the trench. UDI explained that in fact gas facilities use and occupy a portion of the trench for which they should be charged. The Commission was persuaded by this argument, which was central to its conclusion that there can be no "free riders" in the joint trenches. It was this conclusion that caused the Commission to order PG&E to refund to Florsheim the gas trenching cost portion of the joint trenches constructed by Florsheim. This Commission action, based upon UDI's argument, led to PG&E making retroactive refunds of gas trenching costs, and to prospectively implementing Gas Rule 15 in a manner consistent with D.98-09-058.
We reject PG&E's contention that UDI's contribution was not primary or substantial because UDI was not the complainant in the case. The Declaration does not limit availability of compensation from the ATF to complainants. Section 1.3 of the Declaration refers to the "private party" in the litigation. It utilizes the identifier "complainant" in identifying the contribution that the private party must make to qualify for an award. We find the word complainant to be used for illustrative purposes, and not intended to limit ATF awards to the complainant who initiated the complaint case. This interpretation is consistent with the ATF's purpose of making compensation available for representation of consumer interests. In a complaint case the focus of the complainant may be limited to his or her own recovery, though the case may raise broader consumer issues. Representation of the broader consumer interest in the complaint case may fall to an intervenor in the proceeding. If otherwise eligible to receive an award from the ATF, we do not believe that it is consistent with the goals of the ATF to deprive an intervenor of the opportunity for compensation simply because it did not file the original complaint.
We disagree with PG&E's reasoning that UDI's contribution was not direct, primary, and substantial because the quantity and length of its discovery, testimony, and briefs was less than that of Florsheim. Volume of filings and testimony is not the criterion upon which we determine the value of a party's participation. Furthermore, we do not agree with the implication in the Response that only one party can make a direct, primary and substantial contribution to a proceeding. The Declaration's criteria are simply not limited in the ways that PG&E suggests.
3.2 No Means of Charging Costs of
Obtaining Benefit to Benefited Class
Section 1.3 provides three ways to demonstrate eligibility for an award. UDI meets the second of these, which reads as follows: "Fees will be awarded from the ATF where a substantial benefit has been conferred upon a party or members of an ascertainable class, but no means are available for charging those benefited with the cost of obtaining the benefit..." As a result of UDI's contributions in the proceeding, the Commission issued an order that caused PG&E to cease violating Gas Rule 15. As a result developers and builders in PG&E's territory will not be deprived of trenching cost refunds or future cost reimbursement that they are due under Gas Rule 15. This is a benefit that has been conferred upon an ascertainable class (developers and builders of past and future projects who apply to PG&E for gas trenching refunds or cost reimbursement), but there is no means available for charging UDI's litigation expenses to this class. As of February 1, 1999, PG&E had made refunds for 913 past projects. The developers and builders who are entitled to a refund or reimbursement of future costs are an ascertainable class, but there is no means of recovering UDI's expenses from the members of this class. We reject PG&E's argument that UDI is not eligible for an award because its clients who have received refunds could have paid UDI's expenses. UDI's eligibility for an award is based upon the fact that an ascertainable class, broader than its own client base, benefited from UDI's participation.
3.3 Section 1.4 Requirements
The Declaration, Section 1.4 provides that an award will be based upon consideration of four factors. The first factor is the strength or societal importance of the public policy vindicated. In this case, PG&E effectively changed Gas Rule 15 when it refused to issue refunds due to developers and builders. By our decision we enforced the important public policy that a utility may not change its Gas Rules without prior Commission approval. The importance of enforcing this policy, and the resultant refund of monies wrongfully withheld, make this case one in which compensation from the ATF is justified.
The second factor to be considered is the necessity of private enforcement and the magnitude of the burden on the complainant. In this case private enforcement, initiated by Florsheim and further pursued by UDI, was necessary to bring PG&E's misapplication of Gas Rule 15 to the attention of the Commission. While Florsheim was awarded a refund in D.98-09-058, UDI was not entitled to compensation from PG&E because it is not a developer or builder who was wrongly denied a refund. The burden of funding its litigation costs (UDI claims $39,399) is substantial in light of the fact that UDI could not expect an award if complainant prevailed.
The third factor to be considered is the number of people standing to benefit from the decision. The number of people standing to benefit is substantial, pointing to the appropriateness of an award to UDI. As a result of our decision, developers and builders involved with as many as 2,664 past projects may receive refunds. An indeterminate number of future developers and builders will receive gas trench refunds in the future for so long as Gas Rule 15 remains in place. It is possible that purchasers of properties in the projects may ultimately benefit as well if the refunds result in a reduction of purchase prices.
The final factor to be considered is the magnitude of a party's own interest in the litigation. An economic interest in the litigation is not a bar to an award, if the Commission finds good cause for granting an award. In this case UDI did not participate with any expectation of receiving an award in the decision. PG&E points out, however, that UDI may stand to benefit from the decision because its clients are residential developers who stand to obtain refunds and reimbursement of future costs from PG&E. PG&E argues that "...anything it can do to increase its [UDI's] visibility in the market enhances its bottom line." (Response, p. 6.)
While it is possible that UDI's participation may have enhanced its business, we have no basis for quantifying the economic advantage to UDI. In view of the fact that PG&E has identified 2,664 projects for review as Gas Rule 15 projects, and had made refunds in 913 projects as of February 1, 1999, we conclude that UDI's economic interest should not bar its recovery from the ATF. Even assuming that UDI experienced economic advantage from its participation in the proceeding, the benefit that it provided to others outweighs the benefit that it may have personally received and establishes good cause for granting an award.
