Supreme Court Ruling On Power Of ACC Members Puts Utilities On Notice, Gives Burns Big Win

Robert “Bob” Burns

Individual members of the Arizona Corporation Commission who want to delve into how public service corporations like Arizona Public Service Co. (APS) spend their money on lobbyists, charities, and politicians can do so even if the other four commissioners do not support the effort.

That is the long anticipated opinion issued Tuesday by the Arizona Supreme Court in a 4 to 1 ruling which vindicates Robert “Bob” Burns, who was elected to the ACC in November 2012 and left office in January 2021.

Read more by Terri Jo Neff >>

In 2015, Burns requested spending reports from APS regarding allegations of questionable campaign contributions to two other ACC commissioners during the 2014 election cycle. The rumored donations involving Tom Forese and Doug Little were supposedly made in a manner making it difficult for the public to determine the true source of the funds, otherwise known as dark money.

APS, however, did not comply with the Burns’ request. Burns later obtained an opinion from the Arizona Attorney General’s Office that he had authority as an individual commissioner to gather information regarding the political and charitable contributions as well as the lobbying expenditures of public service corporations like APS.

The authority included inspecting the books and records of the company as well as examining company personnel under oath.

By the time of the attorney general’s opinion, APS had filed an application with the ACC to set new utility rates. The commissioners then issued orders setting a procedural schedule, granting several interventions, and consolidating the new rate case with two APS audits.

As the APS rate case was making its way through the ACC, Burns used his authority as a commissioner to twice issue (in 2016 and 2017) two subpoenas seeking information about APS and Pinnacle West’s spending related to political and charitable contributions related to elected members of the ACC.

APS and Pinnacle West asked the ACC to quash Burns’ subpoenas, although the commissioners never ruled on the motion. Burns then turned to the Maricopa County Superior Court, where he sued in March 2017 for a court order recognizing his authority to demand compliance with the subpoenas with or without a majority of support from his four fellow commissioners.

The Maricopa County judge assigned the case put Burns’ lawsuit on hold to give him time to exhaust all administrative remedies he had through the ACC itself. This included asking the commissioners to compel APD and Pinnacle West to comply with the subpoenas.

In June 2017, Burns voted in favor of demanding compliance, while the other commissioners -including Forese and Little- voted against it. Among the arguments was that the information Burns was seeking from APS and Pinnacle West was irrelevant to the rate case being considered by the ACC and that the subpoenaed information was “unduly burdensome” to the utility companies.

Soon after, nearly 40 parties reached a settlement agreement which increased APS’s base rate. A seven-day evidentiary hearing before an administrative law judge (ALJ) ended with the judge recommending the ACC approve the new rate “as just and reasonable.”

The ACC adopted the ALJ’s recommendation for approving the APS rate increase in late 2017. Burns was the lone dissent.

Meanwhile, Burns added his fellow commissioners as defendants in his lawsuit. The Maricopa County judge assigned to the case agreed that an individual commissioner has authority to issue subpoenas but ruled the power to enforce such subpoenas rests only with the full ACC.

As a result, the judge dismissed Burns’ lawsuit. Burns later went back to the court, arguing his authority as an individual ACC commissioner granted under the Arizona Constitution was violated by the ruling.

This time the judge ruled Burns lacked standing to pursue a due process argument. The judge added in dismissing the case again that Burns was not legally entitled to initiate or maintain his own investigation of a fellow commissioner.

The Arizona Court of Appeals would also later ruled against Burns. Then last year the Arizona Supreme Court announced it would review the case, as it presented

“significant issues of statewide concern” even though Burns and the other commissioners are no longer in office.

One of the two “narrow questions” the justices agreed to answer was whether a majority of commissioners can block a sole commissioner from exercising his or her investigatory powers granted in the Arizona Constitution. The other question was if an individual commissioner has standing under Arizona’s Uniform Declaratory Judgment Act to seek court involvement to enforce those powers.

The four-judge majority opinion released by the Arizona Supreme Court on Tuesday ruled in Burns’ favor on both issues.

With respect to a commissioner’s authority to investigate a public service corporation like APS even without majority support of the commission, the opinion authored by Justice Clint Bolick states the constitution does grant lone wolf commissioners like Burns that authority, within limits.

“That does not mean that the individual commissioner’s subpoena powers are without constraint,” Bolick wrote. “To the contrary, they are bound by the Commission’s own limited constitutional authority, as well as the overarching requirements of due process.”

As to Burns’ ability to seek an enforcement court order, the opinion notes Burns had a statutory right to subpoena APS and that the Uniform Declaratory Judgment Act under Arizona Revised Statute 12-1832 applies to administrative orders.

The opinion added, however, that the justices were not implying the fruits of an individual commissioner’s investigation are necessarily admissible in a particular ACC proceeding.

Burns was awarded his attorney fees and court costs as the prevailing party. The next step is for the case to go back to Maricopa County Superior Court “for any further proceedings consistent with this ruling,”

Chief Justice Robert Brutinel and Justice John R. Lopez IV recused themselves from the case, while Vice Chief Justice Ann Timmer dissented from the opinion even though she acknowledged agreeing with “much of the majority’s analysis.”

In 2019, Burns became chairman of the ACC. That same year, APS released information about its 2014 dark money political activities, confirming it had spent

more than $3 million on the five-member ACC election. More than $4.5 million was spent by APS on the ACC elections in 2016.