Need to Enforce Your Utility Easement? - Your Day in Court May Now Be Your Day In Front of the Public Utilities Commission of Ohio

Last month, a dispute over the Illuminating Company’s (the “Company’s”) right to remove a tree within the Company’s easement was heard by the Supreme Court of Ohio in Corrigan v. Illuminating Company, Slip Opinion No. 2009-Ohio-2524.

As aptly put by Judge Lanzinger, who authored the Opinion, “[a]t first glance, this case appears to concern the fate of a single tree. The larger issue, however, is who controls that fate - the Court of Common Pleas or the Public Utilities Commission of Ohio [‘PUCO’].” In a 4-3 decision, the Supreme Court of Ohio overturned the prior rulings of the Cuyahoga County Court of Common Pleas, and the Eighth District Court of Appeals and held that the PUCO gets to control the fate of the tree. Troubling to many, however, is that homeowners contracting with utility companies (in the form of an easement) may no longer have their day in court, but will need to trust the PUCO to fairly resolve disputes regarding easement rights and obligations.

The majority in this case, however, indicated it was not intending to “put the courts out of business” in every utility easement matter. Quoting earlier cases on the subject, the court in Corrigan stated that “the broad jurisdiction of PUCO over service-related matters does not affect the basic jurisdiction of the Court of Common Pleas in other areas of possible claims against utilities, including pure tort and contract claims”. The majority’s distinction appears blurred, however, since a claim regarding a service/maintenance easement provision would constitute a contract claim as well as a service related claim. Reviewing the facts of Corrigan does not help much in understanding the distinction the court is trying to make when contract claims are involved.

The Corrigan case involved a dispute between the Illuminating Company and the Corrigans of Brooklyn, Ohio. The Illuminating Company told the Corrigans that it intended to remove a large maple tree that was on the Corrigan’s property, but within an easement giving the Illuminating Company the right to “cut and remove any trees, shrubs or other obstructions upon the…property which may interfere or threaten to interfere with the construction, operation and maintenance of the Illuminating Company’s transmission lines”. Additional facts in evidence indicate that (i) the maple tree stood within the easement for at least the last fifty (50) years, and (ii) from 1975 to 2000, the Illuminating Company pruned the tree away from the transmission line. In 2000, however, the Company changed its policy in favor of removing vegetation from within its easements. (The evidence showed that after 2000, when the Illuminating Company stopped pruning the tree, the Corrigans pruned the tree on their own, and injected it with a slow growth hormone to stave off further growth and interference with the transmission lines.) When the Company informed the Corrigans in 2004 that it intended to remove their tree, the Corrigans filed their action in Cuyahoga Common Pleas Court.

The Cuyahoga Common Pleas Court, the Eighth District Court of Appeals, and three dissenting judges of the Ohio Supreme Court believed that the courts should have jurisdiction over this matter, not the PUCO.

All of the judges, however, (dissenting as well as concurring), agreed that the “two part test” developed in Allstate v. Cleveland Elec. Illum. Co., (119 Ohio St.3d 301; 2008-Ohio-3917) should be applied to determine jurisdiction in these cases. The two part test is as follows:

1. Is PUCO’s administrative expertise required to resolve the issue in dispute; and

2. Does the act complained of constitute a practice normally authorized by the utility?”

If the answer to either question is in the negative, the claim is not within PUCO’s exclusive jurisdiction. The majority in Corrigan believed both parts of the test were met. It reasoned that the first part of the test was met because the Ohio Administrative Code requires inspections by utility companies at least once a year and the inspections are to be conducted in accordance with programs establishing preventative requirements for the utility to maintain safe and reliable service, which programs would include vegetation control. Because the Illuminating Company’s decision to remove a tree is governed by its vegetation management plan and that plan is regulated by the PUCO, the court concluded that PUCO’s expertise is required to resolve the issue of whether removal of a tree is reasonable. Since vegetation management (the act complained of) is necessary to maintain safe and reliable service, as established (and thus, authorized) in Ohio’s Administrative Code, the second part of the test, (according to the court in Corrigan) is satisfied.

With all due respect to the “Corrigan majority,” it appears that the reasoning proffered by the Eighth District Court of Appeals and the Corrigan dissenting judges offers the better argument to “who controls the fate of the tree”, and less of a potentially chilling effect on utility easement enforcement. In his dissenting opinion, Justice O’Donnell first agrees with the majority and the State ex. rel Ohio Edison Co. v. Shaker case (68 Ohio St.3d 2009, 2011 (1994), reiterating that “because PUCO has exclusive jurisdiction over service-related matters, does not diminish the basic jurisdiction of the Court of Common Pleas over other areas of possible claims against utilities, including pure tort and contract claims”. However, Justice O’Donnell (and the judges concurring in the dissent) maintains that the PUCO has no special expertise with respect to interpretation of an easement, and that the Company’s right to remove the Corrigan’s tree depends on the terms of the easement, not the utilities’ internal vegetation management plan. What worries Justice O’Donnell, worries this author. The fact that the Ohio Administrative Code requires a utility company to have a vegetation management plan should not mean that the utility company is authorized to implement that plan without regard to the terms of an easement negotiated and agreed to by a utility company and a property owner. Since utility easements usually include service/maintenance related (contract) provisions, the potentially disturbing effect is that property owners may not be able to fall back upon the right to bring to a court of competent jurisdiction, most utility easement -- enforcement and interpretation issues.

At first glance, “who controls the fate of a single tree - the Court of Common Pleas or the Public Utilities Commission of Ohio” may well be the larger issue as characterized by the majority in Corrigan. The largest issue, however, seems to be that the fate of trees, or any other potential obstruction in a utility easement (e.g., underground springs, mineral deposits, other vegetation, slopes) may no longer be in the hands of the parties to a utility easement agreement when they seemingly agree, or to the courts, when they don’t agree; but to administrative policies and commissions.

No comments :