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The California Supreme Court ruled Monday that prosecutors can proceed with suits accusing a public utility of unfair business practices even if the company is already being investigated by the state Public Utilities Commission on similar charges. But the court held unanimously that prosecutors must do nothing to undermine a PUC policy or directly contravene any of the commission’s orders or decisions. “In expressly establishing overlapping enforcement authority against public utilities by both the PUC and public prosecutors,” Chief Justice Ronald George wrote, “the Legislature has demonstrated that it contemplates that public prosecutors and the PUC will coordinate their enforcement efforts � to avoid any actual conflict.” The jurisdictional argument was raised by Pacific Bell after district attorneys in Alameda, San Mateo and Monterey counties sued the utility for allegedly deceiving customers while marketing its call blocking, custom calling and inside telephone wire repair services. Pacific Bell argued that the Public Utilities Code prevented the DAs from taking action while the Public Utilities Commission was investigating almost identical allegations by consumers. Both the Alameda County Superior Court and San Francisco’s First District Court of Appeal agreed with Pacific Bell. But the Supreme Court reversed. “Past decisions of this court recognize that the PUC does not have exclusive jurisdiction over all actions against a public utility,” the chief justice wrote, “and that the mere possibility of, or potential for, conflict with the PUC is, in general, insufficient in itself to establish that a civil action against a public utility is precluded.” While the case proceeded through the courts, the PUC completed its investigation and got a final decision imposing a fine of $15.2 million on Pacific Bell. Monday’s ruling could lead to further civil fines in the trial courts. John Britton, a spokesman for SBC, Pacific Bell’s parent company, expressed disappointment at Monday’s Supreme Court ruling. “The case has already been adjudicated at the California Public Utilities Commission, and a final regulatory decision has already been reached,” he said. “The complainants’ pursuit of additional litigation is unnecessary, unproductive and duplicative. SBC is analyzing the opinion, and we’ll decide how to proceed after we review it.” Oddly enough, the PUC itself filed an amicus curiae brief with the Supreme Court, siding with the prosecutors and welcoming any help DAs could provide in keeping utilities in line. The attorney general and the Consumer Attorneys of California also filed briefs in support of the DAs. Pacific Bell was backed by the Civil Justice Association of California and several utilities, including the Southern California Edison Co. James Sturdevant, president of Consumer Attorneys, called the ruling “very significant” and said it “clearly holds” that private attorney general actions are not barred by the PUC codes. “It says that the public utility must establish that there is a real and definable conflict that would arise between the civil case filed in superior court and the enforcement proceedings filed by the PUC,” Sturdevant, of San Francisco’s Sturdevant Law Firm, said. “And the Supreme Court sets the bar very high for that.” The court held that the Public Utilities Code would preclude prosecutions in superior court only if “any relief awarded by the superior court would render completely ineffective or moot the relief, orders or policies previously rendered by the PUC with regard to precisely the same subject matter.” In a footnote, the Supreme Court declined to decide whether the Public Utilities Code could prevent private citizens from bringing private attorneys general actions if a parallel proceeding is pending with the PUC. “We note, however,” George wrote, “that when [an unfair competition law] action is brought by one or more private parties, there may be more of a risk of a lack of coordination with PUC officials, and thus greater danger that the civil action might undermine an ongoing regulatory program or policy of the PUC.” Neither Oakland Deputy DA Harry Johnson, who argued the DAs’ case, nor Pillsbury Winthrop partner Kevin Fong, who represented Pacific Bell, could be reached for comment Monday. The case is People ex rel. Orloff v. Pacific Bell, 03 C.D.O.S 10776.

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