Case Summary for September 10, 2003

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Case Summary for September 10, 2003

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DOCKET SUMMARIES
SUPREME COURT OF MISSOURI

Wednesday, September 10, 2003
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SC85352
State of Missouri ex rel. AG Processing, Inc. v. Public Service Commission of the State of Missouri, and Aquila, Inc., f/k/a Utilicorp United, Inc.
Buchanan and Cole counties
Propriety of utility merger

In October 1999, Utilicorp United, Inc. (now known as Aquila, Inc.), and St. Joseph Light & Power Company (SJLP) sought authority from the public service commission to merge the local company with and into Utilicorp. The next month, the commission granted interventions to the Springfield, Missouri, board of public utilities; Union Electric Company (doing business as Ameren UE); the state department of natural resources; and Ag Processing Inc. (AGP), an agricultural cooperative that operates a major grain processing facility in St. Joseph. Following a hearing, the commission in December 2000 approved the $270 million merger. AGP sought review in the Cole County circuit court, which in September 2001 affirmed the commission's decision.

AGP appeals, arguing the commission erred in approving the merger. It contends the commission's decision was not supported by and was contrary to competent and substantial evidence because it rejected unrefuted evidence that the proposed merger was detrimental to the public interest and ignored unrefuted evidence that the proposed merger was detrimental to SJLP ratepayers. It asserts the commission also refused to decide whether the $92 million acquisition premium would be recovered from ratepayers. AGP also argues that, by failing to require Utilicorp and SJLP to prepare and submit a market power study, the commission improperly shifted the burden of proof from the applicants -- Utilicorp and SJLP -- to the intervenors.

The commission responds that it did not err in approving the merger. It argues its decision was reasonable, lawful and supported by competent and substantial evidence on the whole record. It contends that Utilicorp and SJLP refuted evidence from commission staff and other parties that the proposed merger would be detrimental to the public interest. It asserts that it held to be unpersuasive evidence from the public counsel that purportedly showed that Utilicorp's long-term debt rating would lead to higher rates for SJLP ratepayers. The commission responds that, although AGP failed to preserve the acquisition premium issue for judicial review by not raising the issue in its application for rehearing, the commission was not required to decide the rate-making issue of whether ratepayers could recover the acquisition premium. The commission argues its decision not to require Utilicorp and SJLP to submit a market power study did not shift the burden of proof from the joint applicants to the intervenors.

Utilicorp responds that the commission properly approved the merger. It argues that there was no compelling evidence showing that the merger would have a direct and present detriment on the public interest and that evidence of potential detrimental consequences to SJLP's ratepayers at an indeterminate future time was not sufficient to deny the merger. It contends that, by not raising the issue regarding the acquisition premium in its application for rehearing before the commission, AGP failed to preserve this claim. Utilicorp asserts that its joint application was sufficient because there is no requirement that a market power study be prepared or submitted as part of the application. It further responds that, by not requiring such a study, the commission did not shift the burden of proof to the intervenors because the study was unnecessary, and the commission specifically had rejected requests from parties for such a study.

SC85170
Missouri Bankers Association and Century Bank of the Ozarks v. Director of the Missouri Division of Credit Unions, et al.
Cole and Greene counties
Banks' standing to challenge expansion of credit union membership field

In July 2000, Springfield Telephone Employees Credit Union (STECU) applied for approval for its proposal to become a community credit union, expanding its membership to the entire 417 area code and part of the 573 area code. In reviewing the application, the director of the state's division of credit unions determined that the group to be added consisted of more than 3,000 people and, therefore, forwarded the application to the state credit union commission for consideration of an exemption from the limitations in section 370.081.2, RSMo. The commission granted the exemption and returned the application to the director, who approved that portion of the application seeking to expand membership to the entire 417 area code. Missouri Bankers Association (MBA) and Century Bank of the Ozarks (collectively the bankers) sought review from the commission, which allowed the Missouri Credit Union System, Inc. (the League) to intervene. Following a March 2001 hearing, the commission in August 2001 affirmed the director's decision. The bankers then sought review in the Cole County circuit court, which in September 2002 dismissed the petition, holding that the bankers lacked standing. The bankers appeal.

The bankers argue they have standing to seek judicial review of the commission's decision because section 370.081.5, RSMo, extends appeal rights to any person or entity, including competitors, claiming to be affected adversely by a commission decision. They contend they have standing to seek a declaratory judgment as to the validity of 4 CSR 105-3.010(1) because the language of section 536.053, RSMo, shows a legislative intention to expand the pool of those who may challenge the validity of an administrative rule. They assert MBA has associational standing because its members otherwise would have standing to bring suit in their own right, its interest in defending MBA members from illegitimate competition is germane to MBA's purpose, and its individual members' participation is not necessary for the court to reverse the administrative decisions and invalidate the regulation. The bankers argue the state's policy of competitive regulation of the financial industry gives them the legal right to be free from illegitimate competition from an entity seeking to expand into an entire telephone area code. They contend that an entire telephone area code is not defined narrowly enough to fit into the restrictions of section 370.080.2(2), RSMo. They assert that they are intended beneficiaries of the statute limiting credit union membership fields, that their interests are among those protected by the statute and that application of the administrative rule would affect negatively their right to be free from illegitimate competition.

The director responds that the commission is not an appropriate party because, under chapter 370, RSMo, it is an adjunct executive agency that exercises independent and impartial decision-making authority in reviewing the director's decisions, and its decisions become those of the director. As such, he asserts that it is the director, and not the commission, who becomes the party to any review of that decision. The director argues the bankers lack standing to challenge the commission's decision. He contends a commercial interest in preventing competition does not render a person "aggrieved." The director asserts that section 370.081 does not give the bankers the right to judicial review of the director's decisions because they would not be able to proceed to the circuit court with their claims. He further asserts that the bankers cannot obtain review under chapter 536 because they are not aggrieved, they only seek competitive advantage, and they do not have a legally protectable interest -- from a state regulatory policy or otherwise -- at stake. The director responds that MBA lacks associational standing because its members must have an interest, which they do not, as their only interests are merely competitive.

STECU responds that the bankers lack standing. It argues the bankers are not aggrieved by the commission's decision, they only seek to be free from economic competition and, therefore, do not have a legally cognizable right to protect or enforce, they are not intended beneficiaries of section 370.080.2(2) and their interests are not protected by that section. STECU contends the bankers lack standing to challenge the validity of 4 CSR 105-3.010 because they are not, as a matter of fact or law, aggrieved for the purpose of maintaining a declaratory judgment action pursuant to chapter 536. It further responds that MBA lacks associational standing. It argues none of MBA's members has been shown to have standing to sue or to have a legally recognized interest capable of being protected under chapter 370. STECU contends participation of individual MBA members claiming economic injury is required to establish their interest in being free from injury caused by economic competition from credit unions.

The American Bankers Association argues, as amicus curiae, that MBA, as a trade association representing its members, and Century Bank, as an individual bank, satisfy the various tests for competitor standing.

The Credit Union National Association argues, as amicus curiae, that the court properly dismissed the case. It contends the bankers failed to prove they were aggrieved, even assuming that economic competitors may be aggrieved parties, because they are not actually competitors of STECU and they cannot demonstrate harm to Century Bank or any other bank due to STECU's expanded membership field. The association asserts that, in Missouri, banks and credit unions are not economic competitors.

The National Association of State Credit Union Supervisors argues, as amicus curiae, that the court properly dismissed the case for the bankers' lack of standing. It contends the bankers failed to exhaust all of their administrative remedies because they did not comment or file objections prior to the director's decision. The association asserts Missouri law controls the standing of alleged competitors and that decisions of other states are not instructive here because Missouri's statutory scheme differs from those in other states and the facts of those other cases differ from the facts here.

SC85195
State of Missouri v. Joseph Grubb
Carroll County
Qualification of court-martial as a prior conviction for sentencing

In June 1999, Joseph Grubb married Catherine Lehman, with whom he had lived since 1995. While they were living together, Lehman had a sexual relationship with a man who was one of their coworkers at a Ford plant. She denied having this sexual relationship before marrying Grubb, and she continued to deny it during their marriage. In late May 2000, she told Grubb the truth. In early June 2000, during an argument about Lehman's sexual relationship with the other man, Grubb hit Lehman with two toilet plunger sticks and a broom handle, injuring her right foot and ankle. A couple of weeks later, while arguing again about the same matter, Grubb struck Lehman with his fist, knocking her down and fracturing her eye bone and nose. Between the two arguments, Grubb fractured two of Lehman's fingers and one of her ribs. The state subsequently charged Grubb with four counts of first-degree assault and charged that he was a prior offender based on a 1981 general court-martial conviction for assault. Over his objections, the court found he was a prior offender under section 558.016, RSMo 2000. Following a November 2001 trial, the jury convicted Grubb of two counts of the lesser-included offense of second-degree assault. In January 2002, the court sentenced Grubb as a prior offender to two consecutive sentences of seven years in prison. He appeals.

Grubb argues the court plainly erred in sentencing him as a prior offender. He contends the state failed to prove he was a prior offender under section 558.016, violating his rights to due process and jury sentencing, because Missouri case law and Missouri recidivist statutes prohibit using court-martial convictions as prior offenses.

The state responds that the court did not commit plain error in sentencing Grubb. It argues his court-martial conviction for assault qualifies for enhancement under section 558.016 because all the statute requires is that the prior conviction be a valid felony conviction, which the court-martial is. The state contends that, although section 558.016 does not require it, the military court system in which Grubb received his prior conviction provided him with the necessary level of due process.

SC85018
Tommy R. Dorsey v. State of Missouri
Greene County
Appropriateness of charge enhancement

In January 2001, a Springfield, Missouri, police officer stopped Tommy Dorsey for obstructing traffic with his car. Dorsey allegedly refused to perform field sobriety tests, and the officer ultimately arrested Dorsey. The state charged Dorsey with driving while intoxicated and driving while revoked. The latter charge, which listed Dorsey's previous convictions for first-degree arson, second-degree assault and receiving stolen property of more than $150, plus two previous convictions for second-degree burglary, was enhanced from a misdemeanor to a class D felony. In April 2002, Dorsey appeared in court, with counsel, to plead guilty to the two driving charges. The court read the charges and told Dorsey that he would receive concurrent five-year prison terms if he pled guilty. Dorsey told the court he understood all his rights, had adequate opportunity to consult with his attorney and wished to plead guilty. The court accepted Dorsey's pleas and sentenced him to two concurrent five-year prison terms to be served concurrently with an existing prison sentence. Dorsey subsequently sought post-conviction relief, alleging his attorney and the court misled him to believe that his sentences for the driving charges would be credited for time served while he was in prison on an unrelated assault charge awaiting the plea hearing on the driving charges. He also alleged his attorney failed to file a motion to dismiss the felony charge of driving while revoked or, in the alternative, the enhancement provision the state used to upgrade the charge to a felony. The court denied the motion without an evidentiary hearing, and Dorsey appeals.

Dorsey argues the court violated his due process rights in enhancing the driving while revoked charge from a misdemeanor to a felony based on previous convictions for offenses not related to driving. He contends the pertinent enhancement provision requires proof of four or more prior driver's license revocations, suspensions or cancellations. Dorsey argues, in the alternative, that the court erred in denying post-conviction relief because section 302.321, RSMo, upon which the enhancement was based, is void for vagueness. He asserts that the plain language of this statute permits the state arbitrarily to charge driving while revoked as a class D felony based on any offense rather than those that are related to the subject of the statute. Dorsey argues the court erred in denying his post-conviction relief motion without a hearing because he stated a claim that would entitle him to relief if proven. He contends that had he known he would not be credited for time spent in prison on an unrelated assault charge, he would not have pleaded guilty.

The state responds that the court did not clearly err in denying, without an evidentiary hearing, Dorsey's claim that his attorney was ineffective. The state argues Dorsey's claim that he did not know he would not receive jail time credit for an unrelated assault case is refuted by the record, which contains no promise that the state offered Dorsey jail time credit in exchange for his guilty plea. The state further responds that because Dorsey's guilty plea waived all his claims except whether his plea was voluntary, this Court should not review Dorsey's remaining allegations. The state contends that if this Court does review the constitutionality of section 302.321.2, it should find the statute is not void for vagueness. The state asserts that the statute plainly allows for felony enhancement on a fourth or subsequent "conviction for any other offense."