Bell Atlantic of Maryland, Inc. v. Intercom Systems Corporation

BATTAGLIA, Judge. We issued a writ of certiorari in this case to determine whether the administrative remedy before the Maryland Public Service Commission (“PSC” or “Commission”) as set forth in Maryland Code, Section 3-101 et seq. of the Public Utility Companies Article (1998) is of an exclusive, primary, or concurrent nature with respect to alleged acts of tortious interference with contractual relations, negligence, and breach of contract in connection with the provision of telephone services by petitioner Bell Atlantic of Maryland, Inc. (“Bell Atlantic”) to respondent Intercom Micro Systems, Inc. (“Intercom”). The Court of Special Appeals held that the statutory remedy provided by the Public Utility Companies Article was primary for consumer complaints against public service companies. We now affirm.

I. Facts Respondent Intercom is an internet service provider in the Washington, D.C. metropolitan area. The company was start ⁴ ed in 1993 by its owner, Mark S. Ballard, who currently runs the business from his home in Clinton, Maryland. Petitioner Bell Atlantic of Maryland, Inc. (“Bell Atlantic”) serves as the local exchange carrier providing telephone service to Clinton, Maryland, which includes the business telecommunications services for Intercom. In 1995, Intercom filed seven complaints against Bell Atlantic with the PSC’s Office of Consumer Assistance and Public Affairs (“CAPA”), alleging that Bell Atlantic provided inadequate telecommunications services, engaged in improper billing, and discriminatory treatment. 1 In one complaint, Intercom alleged that Bell Atlantic service outages affecting the dedicated service line being provided to one of Intercom’s clients resulted in the loss of Intercom’s business with that client.

In a separate complaint, Intercom detailed how its incoming phone calls were being routed to one of its competitors located in Laurel, Maryland. The remaining five complaints recounted the numerous losses Intercom ⁵ sustained which were allegedly attributable to instances of Bell Atlantic’s inadequate service and substandard customer service responses to complaints lodged by Intercom. 2 During January and February of 1997, Intercom filed an additional sixteen complaints with the PSC’s CAPA Office. Intercom asserted that Bell Atlantic had failed again to provide Intercom with adequate sendee, billed Intercom incorrectly for the services, and engaged in discriminatory practices. Bell Atlantic conducted an investigation of these complaints, and filed reports with the PSC.

On April 11, 1997, the CAPA Office issued a “final response,” in which it found that Bell Atlantic had not violated any of the PSC’s approved tariffs (fee schedules) and had not acted in bad faith with respect to the provision of telecommunication services to Intercom. The PSC informed Intercom that pursuant to COMAR 20.32.01.04A and 20.07.03.04, it had a ten day period in which it could appeal the findings of the CAPA Office by filing a formal complaint with the full Commission. 3 ⁶ On April 21, 1997, Intercom filed a formal complaint with the PSC, in which it incorporated the sixteen original complaints it had filed previously with the CAPA Office in 1997. Intercom also filed a seventeenth complaint seeking damages for harm suffered by Intercom as a result of Bell Atlantic’s allegedly willful and intentional conduct. Intercom’s damages claimed before the PSC were of a compensatory and punitive nature.

Bell Atlantic interjected jurisdictional defenses to Intercom’s claims by asserting that Intercom’s request for compensatory and punitive damages went beyond the statutory authority of the PSC. The PSC determined that it had jurisdiction to entertain Intercom’s complaints with regard to fee schedules, since these issues were not preempted by the Federal Communications Act, 47 U.S.C. § 151 (1991). Intercom’s complaints of Bell Atlantic’s allegedly willful and intentional conduct interfering with Intercom’s business relations, were addressed by the PSC’s hearing examiner as follows: The business relationship between [Intercom] and [Bell Atlantic] has been one in which [Intercom] has found it necessary to file repeated complaints with this Commission in order to rectify what it considered serious and willful actions taken against it by [Bell Atlantic]. [Intercom] argues that the actions of Bell Atlantic [are] evidence of its intent to destroy the business. Obviously, Bell Atlantic denies such a charge.

Nonetheless, it is entirely understandable that [Intercom] would draw such a conclusion. [Bell Atlantic] is a sophisticated company with technological and management systems in place to provide reliable service to its customers. The cummulative [sic] affect[sic] of the actions described in the [Intercom] complaints certainly belie the standard of reliability expected of Bell Atlantic. ⁷ Therefore, it is, indeed, very troublesome that this succession of problems has occurred. Moreover, it is reasonably foreseeable that the repeated problems could and probably did have serious economic consequences to [Intercom], However, it is not necessary to decide whether Bell Atlantic’s action was taken for the intended purpose to destroy the [Intercom] business. Simply put, the [Intercom] claim for economic damage seeks to obtain a remedy that is beyond the boundary of the tariffs or the Commission’s statutory authority.

Although [Intercom] argues strongly that the action against it was taken with the intent of destroying the business, that allegation cannot be the basis for providing a remedy that is not authorized by statute. There are “numerous decisions that hold that the Commission cannot award monetary damages or assess fines save those specifically provided by statute.” See [In re] Re: The Washington Post Company, 88 Md. PSC 183, 185[, 1997 WL 1008383 ] (1997). Proposed Order of Hearing Examiner, In the Matter of the Complaint of IMS Intercom Against Bell Atlantic-Maryland, Inc. (Dec. 23, 1999). 4 It concluded it lacked the authority to entertain Intercom’s request for punitive and consequential damages, the PSC granted Bell Atlantic’s Motion for Summary Dismissal. In addition to the administrative remedies available under Sections 3-101 through 3-209 of the Public Utility Companies Article of the Maryland Code, Intercom sought direct judicial relief in the form of an independent judicial action.

On April 16, 1997, Intercom filed a lawsuit against Bell Atlantic in the Circuit Court for Prince George’s County, alleging tortious interference with contractual relations, negligence, and breach of contract. Intercom alleged that Bell Atlantic intentionally ⁸ interfered with Intercom’s business because it, either directly or through its subsidiaries, was a direct competitor of Intercom in providing internet access services to the general public. Specifically, Intercom alleged that beginning in May of 1994, Bell Atlantic failed to promptly provide Intercom with new or additional circuits to accommodate its expanding business. Intercom asserted that those circuits that Bell Atlantic had provided repeatedly failed in their performance or were of low quality.

The complaint also alleged that Bell Atlantic improperly charged Intercom for the services which it provided, and that Bell Atlantic engaged in conduct which demonstrated billing and service preferences for Intercom’s competitors. In support of its allegations of discriminatory treatment, Intercom asserted that Bell Atlantic had rerouted or forwarded Intercom’s voice lines to competitor internet service providers, and that Bell Atlantic had refused to list Intercom in the White Pages or in its 411 Information Directory listings, although Intercom had ordered such service. Based on these allegations, Intercom sought judicial relief in the form of compensatory and punitive damages. In response, Bell Atlantic filed a motion to dismiss Intercom’s complaint for failure to state a claim upon which relief could be granted by the court because Intercom’s claims fell “squarely within the exclusive jurisdiction of the Maryland Public Service Commission,” pursuant to the Public Utility Companies Article of the Maryland Code.

Thus, Bell Atlantic argued that the only judicial determination available to Intercom would be judicial review of a final order of the PSC, which had not been issued at that time. On November 14, 1997, the Circuit Court for Prince George’s County heard Bell Atlantic’s motion to dismiss, at which time Intercom argued that the claims it raised against Bell Atlantic were of a hybrid nature-some could be addressed by the PSC and others were common law tort claims which could be pursued in an independent judicial action. The trial court gave the following rationale for its dismissal of Intercom’s suit: ⁹ I believe that the allegations raised in the complaint are within the exclusive jurisdiction of the Public Service Commission. The cases cited in support of the Court retaining jurisdiction or staying [sic] that we somehow have some type of concurrence [sic], successive concurrence [sic] jurisdiction [is not persuasive].

The allegation that the Public Service Commission cannot make the Plaintiff whole was raised in Bits ‘N’ Bytes, and Judge Motz and the panel did not find that persuasive. Certainly the matters raised in the complaint about that, I went over, five out of seven fall within the Public Service Commission. In looking at others in the charge, the remaining two, it seems, would be in the courts, which really do, when they look at these situations, ask was there a right that existed at common law that has been infringed? And if you were to look at any of the allegations raised, there really wouldn’t be a common law or statutory legally created cause of action.

And there’s no third party involved. This is not a situation in which the Defendant is deemed or asserted to have conspired with another party. There, the common law action would be conspiracy and the third party clearly couldn’t be brought before the PSC and this Court would have jurisdiction. I read the issues that were raised in the complaint and if there is ever a case that would cry out for administrative expertise, indeed, it is in six of the seven issues that are raised with regard to the assignment of lines whether there was even good or bad quality, the assignment of circuits and things of that nature clearly are within the administrative agency’s expertise.

I do find that the Public Service Commission has primary jurisdiction, and, secondarily, I find this jurisdiction is exclusive. Therefore, there is no reason to stay this case, and, therefore, the motion to dismiss is granted and this case is closed statistically. ¹⁰ On December 5, 1997, Intercom filed a notice of appeal to the Court of Special Appeals pursuant to Maryland Code, § 12-301 of the Courts and Judicial Proceedings Article (1974, 1995 Repl. Vol., 1997 Supp.) regarding the circuit court’s dismissal in favor of Bell Atlantic. The Court of Special Appeals reversed the judgment of the circuit court.

See Intercom Sys. Corp. v. Bell Atlantic of Maryland, Inc., 135 Md.App. 624, 627 , 763 A.2d 1196, 1197 (2000). The Court of Special Appeals held that the administrative remedy available to Intercom through the Public Utility Companies Article was primary, rather than exclusive or concurrent, based upon the comprehensive nature of the administrative scheme established for the PSC. Id. at 644 , 763 A.2d at 1206 .

On the other hand, the Court of Special Appeals reasoned that the administrative remedy available under the Public Utility Companies Article could not be exclusive because: [I]t is highly unlikely that the Legislature, in creating the administrative remedy in question to address regulatory problems and common consumer complaints before the Commission, intended to shield the public utility companies and their subsidiaries from lawful competition. But that’s precisely what would occur if we found the PSC remedy to be exclusive. To so rule would, in effect, leave their competitors, big and small, without any means of seeking economic' redress even when, as allegedly occurred here, they have been economically damaged, or in some cases even driven out of business, by the practices of a public utility company. Id. at 641 , 763 A.2d at 1205 .

On February 6, 2001, Bell Atlantic filed a Petition for Writ of Certiorari in this Court. We granted the petition, and now consider whether the administrative remedy of the PSC is exclusive, primary or concurrent with alternative judicial remedies. We respond to this inquiry by holding that the administrative remedy of the PSC is primary for consumer complaints, which may be brought under Section 3-101 et seq. of the Public Utility Companies Article of the Maryland Code. Consumers must exhaust the statutory remedies provided ¹¹ therein before pursuing available independent judicial relief in the form of common law actions.

II

Discussion The question Bell Atlantic has posed to this Court requires an examination of the scope and purpose of the statutory scheme embodied in the Public Utility Companies Article involving public service companies who are in the business of providing telephone service within Maryland. The proceeding for judicial review in cases governed by the Public Utility Companies Act shall be heard in “the circuit court in equity for any county in which the public service company involved in the proceeding operates” or in “the Circuit Court in equity for Baltimore City.” Md.Code, § 3-204(a) of the Public Utility Companies Article. It stands to reason that this circumscribes the types of relief the circuit court may grant in this specialized judicial proceeding. While comprehensive in nature, the regulatory framework of the Public Utility Companies Article is not all-encompassing so as to preempt all fora where potential claims may arise against public service companies.

In Zappone v. Liberty Life Ins. Co., 349 Md. 45 , 706 A.2d 1060 (1998), this Court analyzed the relationship between statutorily provided administrative remedies and coextensive judicial remedies and defined three different frameworks as follows: First, the administrative remedy may be exclusive, thus precluding any resort to an alternative remedy. Under this scenario, there simply is no alternative cause of action for matters covered by the statutory administrative remedy. Second, the administrative remedy may be primary but not exclusive.

In this situation, a claimant must invoke and exhaust the administrative remedy, and seek judicial review of an adverse administrative decision, before a court can properly adjudicate the merits of the alternative judicial remedy. ¹² Third, the administrative remedy and the alternative judicial remedy may be fully concurrent, with neither remedy being primary, and the plaintiff at his or her option may pursue the judicial remedy without the necessity of invoking and exhausting the administrative remedy. Zappone, 349 Md. at 60-61 , 706 A.2d at 1067-68 . We emphasized that “where neither the statutory language nor the legislative history disclose an intent that the administrative remedy is to be exclusive, and where there is an alternative judicial remedy under another statute or under common law or equitable principles, there is no presumption that the administrative remedy was intended to be exclusive.” Zappone, 349 Md. at 63 , 706 A.2d at 1069 . Instead, we found a rebuttable presumption that in the absence of specific statutory language indicating otherwise, an administrative remedy was intended to be primary.

See id. at 63-64 , 706 A.2d at 1069 . In evaluating this presumption, we are encouraged to consider numerous factors, including the “comprehensiveness of the administrative remedy,” the agency’s view of the scope of its jurisdiction, and the “nature of the alternative judicial cause of action pursued by the plaintiff’ in refuting the presumption that the legislature intended the administrative remedy to be primary. See id. at 64-65 , 706 A.2d at 1070 . The determination of whether the administrative remedy of the Public Utility Companies Article was intended to be exclusive, primary, or concurrent requires an examination of the language of the statute itself as a point of departure, and subsequent exploration of its underlying policies.

See Mid-Atlantic Power Supply Ass’n v. Pub. Serv. Comm’n of Maryland, 361 Md. 196, 203-04 , 760 A.2d 1087, 1091 (2000); Read v. Supervisor of Assessments of Anne Arundel County, 354 Md. 383, 392-93 , 731 A.2d 868, 873 (1999); Board of License Comm’rs for Charles County v. Toye, 354 Md. 116, 122 , 729 A.2d 407, 410 (1999). In the present case, however, the statutory language does not define whether the PSC has exclusive, primary, or concurrent jurisdiction to hear consumer complaints brought against the public service companies it regulates. ¹³ Therefore, we must interpret the intention of the General Assembly in enacting the regulatory scheme now known as the Public Utility Companies Article of the Maryland Code, thereby creating the PSC.

See Taylor v. Friedman, 344 Md. 572, 582 , 689 A.2d 59, 63 (1997); Maryland Reclamation Assocs. v. Harford County, 342 Md. 476, 493 , 677 A.2d 567 , 576 (1996); Maryland-National Capital Park & Planning Comm’n v. Crawford, 307 Md. 1 , 14-15 n. 5, 511 A.2d 1079 , 1086 n. 5 (1986). Where we seek to ascertain legislative intent in the absence of specific statutory language, we must explore the context in which the statute was enacted. See Baltimore Harbor Charters, Ltd. v. Ayd, 365 Md. 366, 377 , 780 A.2d 303, 310 (2001); Tipton v. Partner’s Management Co., 364 Md. 419, 435 , 773 A.2d 488, 497-98 (2001). The context of a statute “may include related statutes, pertinent legislative history and other material that fairly bears on the .. . fundamental issue of legislative purpose or goal ...” Graves v. State, 364 Md. 329, 347 , 772 A.2d 1225, 1236 (2001)(quoting GEICO v. Insurance Comm’r, 332 Md. 124, 132 , 630 A.2d 713, 717 (1993)); see Mayor & City Council of Baltimore v. Chase, 360 Md. 121, 131 , 756 A.2d 987, 993 (2000).

On January 5, 1910, Maryland Governor Austin L. Crothers sent a letter to the Maryland Senate and House of Delegates, reminding the General Assembly of the promises made in the Democratic Platform of 1909. With regard to the formation of a Public Utilities Commission, the platform declared: The reasonable and just regulation of public-service corporations through the agency of a commission with prescribed powers and duties has, as a policy, been adopted by a number of the largest and leading States of the Union, and is under favorable consideration in many other States. A quarter of a century ago, approximately, the Federal Government led the way in the pursuance of this important policy by the establishment of the Interstate Commerce Commission. Many of the States of the Union have for years had railroad commissions for the reasonable regulation of the service afforded and the rates charged by common carriers.

And the functions of these commissions ¹⁴ in various parts of the Union are being extended so as to embrace the power and duty of regulative control over other public utilities and accommodations. In the States of New York and Wisconsin, and in the Southern States of Virginia and North Carolina experience has shown that such commissions furnish appropriate and essential protection to the rights and interests of the public, whilst at the same time they afford important and just safeguards and immunities to the public-service corporations themselves. The fact is so obvious as to dispense with the necessity of prolonged discussion that a public-service commission in the State of Maryland, as in other States, will shield and secure the people from injustice, abuse and disadvantages of whatsoever form at the hands of great corporations engaged for then-own profit in the sale and supply of utilities and service of a general and public nature, and -will reasonably guarantee to the people adequate and proper servieé at just prices. The people are entitled to this in respect to the utilities in question — that is to say, they are entitled to justice — no more, no less.

On the other hand, the same measure of regard and consideration is due to the capital and corporate and personal interest engaged and involved in the organization and maintenance of the public-service corporations of this State. These institutions, it cannot be denied, are often subjected to unreasonable demands and unjustifiable attacks. They, too, are entitled to justice-no more, no less. A public-service commission clothed with the necessary powers and charged with appropriate functions, and above all else, composed of men imbued with a full measure and high standard of intelligence, character and public spirit, would meet these requirements and subserve and accomplish the great public end in view, which, after all, is the full preservation to the people of the rights and advantages to which they are justly entitled without imposing unnecessary or unreasonable burdens upon the corporations in question.

To effect this rightful object, which, indeed, is one of the salutary ends of government itself, it is indispensable not only that such a commission be provided for by the Legisla ¹⁵ ture, but that it be vested with full and plenary powers to effectually and impartially accomplish its important object with respect to all public-service corporations in the State in their various relations to the people. This is the spirit and design of the pledge we made to the people. Without hesitancy or shortcoming in any particular, let us now faithfully redeem it. Letter from Maryland Governor Austin L. Crothers to the Senate and House of Delegates (January 5, 1910), at 4-6.

With the task of providing justice for consumers clearly set forth, the General Assembly enacted the Public Service Commission Law on April 5, 1910. The statute set forth a regulatory scheme and created the PSC in order “to provide for the regulation and control of public service corporations and public utilities, and making appropriations therefor.” 1910 Md. Laws, ch. 180. The statute required that all telegraph and telephone companies “provide such service and facilities as shall be adequate, just and reasonable” in a nondiscriminatory fashion. It also gave the Commission broad authority and discretion to monitor and regulate corporate behavior. 5 1910 Md. Law, ch. 180, § 40.

The statute also ¹⁶ empowered the Commission to hold hearings concerning the adequacy of service and order repairs as necessary to improve ¹⁷ such service. See 1910 Md. Laws, ch. 180 § 40. Thus, in an early case involving the interaction of the Public Service Commission Law and a municipal charter, this Court explained: The Legislature of 1910 took up, and for the first time in this State, enacted a law for the purpose of regulating in various ways the class of corporations or firms conducting public utilities. The grant of power as contained in the Act, while in general language, was intended to be extremely comprehensive.

Mayor of Crisfield v. Chesapeake & Potomac Tel. Co., 131 Md. 444, 446 , 102 A. 751 (1917). Over the next several decades, the General Assembly revised the language of the Public Service Commission Law, streamlining the statute without altering the regulatory function of the PSC or affecting the substantive rights of parties who filed complaints with the Commission. For example, Article 78 of the Maryland Code (1951) elucidated the scope of the investigatory and regulatory powers of the Commission in a more concise fashion, as follows: The Commission shall have full power and authority to make joint investigations, hold joint hearings, and issue joint or concurrent orders in conjunction or concurrence with any official board or commission of any state or of the United States, whether in the holding of such investigations or hearings or in the making of such orders the Commission shall function under agreements or compacts between states, or under the concurrent power of states to regulate interstate commerce, or as an agency of the Federal Government, or otherwise.

Md.Code, Art. 78 § 5 (1951). 6 The 1955 Laws of Maryland repealed and reenacted a new Article 78, which again, reenforced the responsibility of the Commission to supervise, ¹⁸ regulate, and enforce compliance with the provisions contained in the Public Service Commission Law. See 1955 Md. Laws, ch. 441. For instance, since its inception the statute has continually authorized the imposition of fines against personnel of the Commission or agents or officers of public service companies who violate the provisions of the statute. See Md.Code, § 13-101 et seq. of the Public Utility Companies Article (1998); Md.Code, Art. 78 § 101 (1957, 1995 Repl.

Vol.); 1955 Md. Laws, ch. 441, § 94; Md.Code, Art. 78 § 69 (1951); Md.Code, Art. 23 § 410 (1939); Md.Code, Art. 23 § 402 (1924); Md.Code, Art. 23 § 456 (1912); 1910 Md. Laws, ch. 108, § 39. In 1998, the General Assembly repealed the Public Service Commission Law contained in Article 78 of the Maryland Code and recodified those provisions in the creation of the Public Utility Companies Article of the Maryland Code. See 1998 Md. Laws, ch. 8. 7 The current law requires “[a] public service company [to] furnish equipment, services, and facilities that are safe, adequate, just, reasonable, economical, and efficient, considering the conservation of natural resources and the quality of the environment.” Md.Code, § 5-303 of the Public Utility Companies Article. 8 In order to achieve these goals, the General Assembly vested the Commission with broad supervisory and regulatory powers. The jurisdiction of the Commission extends to “each public service company that engages in or operates a utility business in the State ... ”.

Md.Code, § 2-112(a) of the Public Utility Companies Article ¹⁹ (1998). The powers of the Commission are those “specifically conferred by law” and “the implied and incidental powers needed or proper to carry out its functions” as established by the Public Utility Companies Article. § 2-112(b). The Commission is charged with the following responsibilities: (a) In general. — (1) The Commission shall: (i) supervise and regulate the public service companies subject to the jurisdiction of the Commission to: 1. ensure their operation in the interest of the public; and 2. promote adequate, economical, and efficient delivery of utility services in the State without unjust discrimination; and (ii) enforce compliance with the requirements of law by public service companies, including requirements with respect to financial condition, capitalization, franchises, plant, manner of operation, rates, and service. (2) In supervising and regulating public service companies, the Commission shall consider the public safety, the economy of the State, the conservation of natural resources, and the preservation of environmental quality.

(b) Construction. — The powers and duties listed in this title do not limit the scope of the general powers and duties of the Commission provided for by this article. Md.Code, § 2-113 of the Public Utility Companies Article. The Commission may promulgate regulations as necessary to fulfill its mission and may conduct investigations of its regulated entities. See Md.Code, §§ 2-115(a) and 2-121 of the Public Utility Companies Article.

The Commission also serves a legislative function in its advisory role to the Governor and the General Assembly and conducts independent proceedings concerning proposed amendments to any laws which the Commission believes “would affect the public interest in any aspect of the business of a public service company.” Md.Code, § 2-116(a) of the Public Utility Companies Article. The mandate of the Commission extends to injunctive relief when it determines that a public service company is violating ²⁰ the provisions of the Public Utility Companies Article. See McLCode, § 2-117 of the Public Utility Compames Article. The statute also allows the Commission to serve as a forum to address consumer complaints.

Anyone may file a complaint with the Commission alleging a violation by a public service company. See Md.Code, § 3-102(a). The traditional rules of evidence and procedure are not applicable at hearings conducted before the Commission. See Md.Code, § 3 — 101(b).

In most