BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION George Morris : C-923820 : V. : : Oneida Water Company : INTERIM ORDER On or about January 27, 1992, George Morris (hereinafter "Complainant") filed a formal complaint with the Pennsylvania Public Utility Commission alleging that inadequate service is being provided by Oneida Water Company (hereinafter "Respondent") in that the water pressure to his residence at Lot C-26 in the Valley of Lakes/Eagle Rock Resort is low, and that ofttimes there have been interruptions of service. Thereafter, on April 7, 1992, Respondent filed a Chapter 11 Petition in Bankruptcy in the United States District Court for the Middle District of Pennsylvania. On or about June 25, 1992 Respondent filed a "preliminary motion" asking that this Commission refrain from taking any further action upon this proceeding (hereinafter "preliminary motion") on the grounds that the Commission lacks jurisdiction during the pendency of the Bankruptcy proceeding. It also filed a "Memorandum of Law" in support of its said preliminary motion. The Office of the Consumer Advocate filed 1 its notice of intervention in this matter, and has filed its own memorandum of law and supplemental memorandum of law, urging denial of the preliminary motion. Various pre-hearing conferences were held, and various delays in disposing of the preliminary motion were agreed upon and ordered by the undersigned due to Respondent's continuing efforts to secure financing which would, with the Bankruptcy's Court's approval, enable it to remediate problems with its water facilities. Respondeht's efforts in that regard have not been availing, however. This Order will dispose of the preliminary motion. Respondent's position is that under Section 362(a)(1) and (3) of the Bankruptcy Code (11 U.S.C. 362(a)(1) and (3)), automatic stay of all judicial proceedings against the bankruptcy petitioner is mandated. Those sections state: "Except as provided in subsection (b) of this section, a petition filed under section 301 [voluntary petition] ... of this title ... operates as a stay, applicable to all entities, of - "(1) the commencement or continuation ... of a judicial, administrative... proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title; "... "(3) any act to obtain possession of property of the estate or of property from the estate 2 or to exercise control over property of the estate." Respondent acknowledges existence of an exception to the automatic stay of proceedings set forth in 11 U. S. C. § 362(b)(4). That section provides that the: "...filing of a petition under Section 301... does not operate as a stay... under Section (a)(1) of this section, of the commencement or continuance of an action or proceeding by a governmental unit to enforce such governmental unit's police or regulatory power...." (emphasis added) OCA urges that this exception should apply in this case, even though the Public Utility Commission did not initiate this complaint proceeding, and even though the Commission's prosecutorial powers under the Public Utility Code are not being employed. OCA quotes from Penn Terra Ltd. v. Department of Environmental Resources, 733 F.2d 267 (Third Circuit, 1984), at page 272 thusly: "Paragraph (4) excepts commencement or continuation of actions and proceedings by governmental units to enforce police or regulatory powers. Thus, where a governmental unit is suing a debtor to prevent or stop violation of fraud, environmental protection, consumer protection, safety, or similar police or regulatory laws, or attempting to fix damages for violation of such a law, the action or proceeding is not stayed under the automatic stay." 3 OCA urges that this Commission is a "governmental unit" pursuant to the definition of the bankruptcy code, and cites for that proposition in re Begley v. Philadelphia Electric Co., 46 Bankr. 707 (E.D. Pa. 1984). OCA argues that this case involves enforcement of the Commission's police or regulatory power in that the private complainant seeks a Commission order finding that respondent has failed to fulfill its duties under the Pennsylvania Public Utility Code and under the Commission's regulations, and that, therefore, the case comes within the purview of the exception to the automatic stay above quoted. OCA, in its excellent memorandum of law, cites to our attention a split of authority concerning the question of whether or not the governmental unit itself must bring the action (in order for it to be exempt from the automatic stay of proceedings), or whether exemption arises when a private citizen, and not a governmental regulatory body, institutes such action. OCA candidly cites to our attention the cases of In Re Revere Copper and Brass, Inc., 29 Bankr. 584 (1983); In Re Chateaugay Corp., 118 Bankr. 19 (1990); and in Re 1736 18th St., Ltd. Partnership, 97 Bankr. 121 (1989). Those cases held that there is no exemption unless the governmental unit has initiated the enforcement proceeding. OCA urges, however, that there is another line of cases whose holdings would support "automatic stay of proceeding" exemption even when a private citizen initiates the action. It 4 cites, inter alia, for that proposition In Re Dervos, 37 Bankr. 731 (1984); and In Re The Briarcliff, 16 Bankr. 544 (1981). In summarizing the rationale of this line of cases, OCA states (page 10, original memorandum of law): "In other words, the courts have interpreted this exemption to facilitate the interest of Congress to leave the police powers with the States. Where the state customarily exercises that power through actions initiated by individuals, the State may continue to do so while a bankruptcy proceeding is pending." Our deliberation upon this issue has led us to conclude that the line of cases cited by OCA standing for the proposition that the governmental unit must be the complainant in order for the exemption from the "automatic stay of proceedings" to be in effect is the correct one. The only connection which this Commission now has with the instant complaint is that of the impartial tribunal adjudicating the rights of the Complainant, Respondent and Intervenor (OCA). Its Law Bureau has refrained from recommending to this Commission that a complaint proceeding be instituted against Oneida and/or the Commission has decided that such action on its part would be inappropriate. The Public Utility Commission is a multi-faceted organization with both an adjudicatory function and a prosecutory function (as well as a legislative function and an executive function). In the instant case its adjudicatory function, only, has been augmented. Its prosecutorial function, delegated to the 5 Law Bureau pursuant to Section 308 of the Public Utility Code, and as authorized by Section 1505 of the Public Utility Code, has not been employed. Pursuant to those sections of the Public Utility Code, this Commission frequently enforces utilities' obligations to provide safe and reliable service by utilization of its prosecutorial function. Thus, even under that line of cases cited by OCA for the proposition that the exemption from "automatic stay of proceedings" is in place when a private citizen is the complainant under circumstances where the customary method of regulation is by private citizen complaint, this Commission would be divested of adjudicatory jurisdiction since its prosecutorial arm has not been employed pursuant to legal authority and oft-utilized procedure. This case is distinguishable from those cited by OCA thusly: in Briarcliff, supra, the Rent Control Board depended upon the private complaints of tenants for enforcement of the rent control provisions of the law; and in Dervos, supra, typically a private complaint was brought by an employee charging a violation of the State's Wage Payment and Collection Act. In the instant case, on the other hand, the regulatory body is a commission which, as a matter of practice, does not merely rely upon third party complaints for exercise of its enforcement powers. Moreover, OCA's participation does not confer any jurisdiction upon this Commission, either. Nor, we hastily add, 6 has OCA suggested otherwise. We have examined OCA's Enabling Act (at 71 P.S. Section 309, et seq.), and we find that it fails to create any regulatory or police power exercisable by OCA. Its sole authority is to regulate "the interest of consumers as a party, or otherwise participate for the purpose of representing the interest of consumers" before other regulatory agencies and before the courts. Accordingly, we now enter the following ORDER: 1. That the complaint proceeding of George Morris against Oneida Water Coiipany at C-923820 shall be stayed until such time as the United States Bankruptcy Court proceeding involving Oneida Water Company has terminated, or until such time as the said Bankruptcy Court has terminated its automatic stay of proceedings concerning this complaint proceeding. The attorney- of-record for Oneida Water Company shall forthwith notify this Commission when either of the events mentioned in this ordering paragraph has occurred. 2. That this complaint proceeding of George Morris v. Oneida Water Company is severed from those cases with which it was previously consolidated, to wit, Leon Dongelewicz (C-924012) and Samuel Rizzo (C-924186) v. Oneida Water Company. Date May 21, 1993 /s/ RICHARD M. LOVENWIRTH Administrative Law Judge 7 George Morris V. Oneida water Company C-00923820 Service of the foregoing document was made on May 21, 1993 via first-class mail upon the following parties: John J. Sellinger, Esq. Mattioni, Mattioni & Mattioni 399 Market Street, 2nd Floor Philadelphia, Pennsylvania 19106 Susan Jin Davis, Esq. Christine Maloni Hoover, Esq. Office of Consumer Advocate 1425 Strawberry Square Harrisburg, Pennsylvania I"/120 George Morris 626 Lake Valley Drive Valley of Lakes P. O. Box 242 Nuremberg, PA 18241 Leon R. Dongelewicz Cheyney Drive, Lot D70 P. O. Box 204 Nuremberg, PA 18241 Samuel Rizzo C-28 Lake View Drive Valley of Lakes Nuremberg, Pennsylvania 18241
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