decided: December 1, 1977.
ALLEN L. FEINGOLD, INDIVIDUALLY, AND A. L. FEINGOLD ASSOCIATES, APPELLANTS,
BELL OF PENNSYLVANIA, APPELLEE
Allen L. Feingold, Philadelphia, for appellants.
Raymond F. Scully, William M. Hebrank, Jerome J. Shestack, Philadelphia, for appellee.
Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Jones, former C. J., did not participate in the consideration or decision of this case. Roberts and Pomeroy, JJ., filed dissenting opinions.
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Appellants, Allen L. Feingold, individually and A. L. Feingold Associates, commenced an action in Equity in
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the Common Pleas Court of Philadelphia County against the Bell Telephone Company of Pennsylvania, seeking, inter alia, injunctive relief and compensatory and punitive damages. Bell Telephone responded by filing preliminary objections to the complaint. After argument, the court dismissed the complaint with prejudice finding that the appellants had failed to exhaust their administrative remedies. Hence this appeal.*fn1
In considering whether the lower court properly sustained appellee's preliminary objections, this Court must assume the truth of the factual averments in appellant's complaint, as summarized below. Allstate v. Fioravanti, 451 Pa. 108, 299 A.2d 585 (1973); Eden Roc Country Club v. Mullhauser, 416 Pa. 61, 204 A.2d 465 (1964).
On June 1, 1970, appellant moved his office from 1313 One East Penn Square to 506 East Penn Square in Philadelphia. He was given a new telephone number at that time. Since the Philadelphia directories listed his office under the old number, appellee provided a tape recorded referral giving the new number to anyone calling the original listing. The referral operated properly for about two months, at which time, appellant alleged it was disconnected by appellee, so that callers heard a ring, indicating that the telephone was functional but simply was not being answered. Appellant
[ 477 Pa. Page 5]
alleged that as a result clients and colleagues were unable to reach him by telephone. The problem was allegedly aggravated when new directories were issued by appellee still containing appellant's original number while the referral recording still remained inoperative. Appellant further alleged that repeated requests and demands to appellee to correct the referral or to assign the old number to another subscriber went unheeded. Appellant alleged that as a result of this problem his business declined.
Appellant also complained that appellee disconnected his telephone service on or about March 20 and March 21, 1974, because appellant attached a privately maintained answering device to his new telephone. Telephone service was reconnected, but it is alleged that appellee still threatens discontinuance of service if the answering device is used.
Finally, appellant complains of appellee's refusal to provide him with mobile telephone service. Appellant applied to appellee for a mobile unit in 1969 and was told at that time of the existence of a waiting list of approximately two years for such service. Appellant checked on the status of the application in 1972 and was informed by appellee that the application was cancelled or destroyed because appellee was unable to contact appellant to verify the application. Appellant alleged that appellee was unable to contact them due to the difficulties with the tape-recorded referral system described above.
The question presented by this case is whether appellant, seeking both legal and equitable relief against a public utility, should have first exhausted his administrative remedies under the Public Utility Law, Act of May 28, 1937, P.L. 1053, 66 P.S. § 1101 et seq. (1959 & Supp.1977-78), before seeking a judicial remedy.*fn2
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The lower court answered this question in the affirmative. For the reasons that follow, we disagree.
This Court has long recognized and applied the general rule requiring a petitioner to exhaust all available administrative remedies before seeking judicial redress for an alleged wrongdoing by a public utility. See, e. g., Commonwealth v. Glen Alden Corp., 418 Pa. 57, 210 A.2d 256 (1965); Collegeville Borough v. Philadelphia Suburban Water Co., 377 Pa. 636, 105 A.2d 722 (1954). The rationale behind this rule is clear. When the Legislature has seen fit to enact a pervasive regulatory scheme and to establish a governmental agency possessing expertise and broad regulatory and remedial powers to administer that statutory scheme, a court should be reluctant to interfere in those matters and disputes which were intended by the Legislature to be considered, at least initially, by the administrative agency. Full utilization of the expertise derived from the development of various administrative bodies would be frustrated by indiscriminate judicial intrusions into matters within the various agencies' respective domains.*fn3 See Colteryahn Sanitary Dairy v. Milk Control Commission, 332 Pa. 15, 1 A.2d 775 (1938), construing, Act of March 21, 1806, P.L. 558, 46 P.S. § 156, consolidated by, Act of Nov. 2, 1970, P.L. 707, No. 230, 1 Pa.C.S. § 1504 (Supp.1977-78); Commonwealth v. Glen Alden Corp., supra.
As with all legal rules, the exhaustion of administrative remedies rule is neither inflexible nor absolute, and
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this Court has established exceptions to the rule. Thus, a court may exercise jurisdiction where the administrative remedy is inadequate. Borough of Green Tree v. Board of Property Assessments, 459 Pa. 268, 328 A.2d 819 (1974); Philadelphia Life Ins. Co. v. Commonwealth, 410 Pa. 571, 190 A.2d 111 (1963). The mere existence of a remedy does not dispose of the question of its adequacy; the administrative remedy must be "adequate and complete." Philadelphia Life Ins. Co. v. Commonwealth, supra 410 Pa. at 580, 190 A.2d at 116. In the case now before us, we must determine the narrower issue of whether appellant had adequate administrative remedies available under the Public Utility Law.
The Public Utility Law placed a broad range of subject matters under the control of the Public Utility Commission (PUC), making that agency responsible for ensuring the adequacy, efficiency, safety, and reasonableness of public utility services. Act of May 28, 1937, P.L. 1053, art. IV, as amended, Act of October 7, 1976, P.L. 1057, No. 215, 66 P.S. § 1171 (Supp.1977-78). It can be conceded that the subject matter of appellant's complaint is encompassed by Section 401 of the Public Utility Law. The enforcement and remedial powers of the PUC, although formidable, are not those of a court. The PUC is empowered to correct, by regulation or order, abuses in the provision of service. Act of May 28, 1937, P.L. 1053, § 413, 66 P.S. § 1183 (1959). The PUC has the power to impose fines upon a public utility for violation of the Public Utility Law. Act of May 28, 1937, P.L. 1053, art. XIII, § 1301, as amended, Act of October 7, 1976, P.L. 1057, No. 215, § 25, 66 P.S. § 1491 (Supp.1977-78). If the PUC determines that the Public Utility Law, a regulation or order has been or is about to be violated, the PUC may petition the Court of Common Pleas of Dauphin County for appropriate judicial enforcement. Act of May 28, 1937, P.L. 1053, art. IX, § 903, as amended, Act of June 3, 1971, P.L. 137, No. 6, § 1, 66 P.S. § 1343 (Supp.1977-78). Alternatively, the PUC may request that the Attorney General initiate legal proceedings to obtain judicial enforcement
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of the Public Utility Law or a PUC order or regulation. Act of May 28, 1937, P.L. 1053, art. IX, § 904, 66 P.S. § 1344 (1959). Since the PUC is a creature of statute, it has only those powers which are expressly conferred upon it by the Legislature and those powers which arise by necessary implication. Allegheny County Port Authority v. Pa. P. U. C., 427 Pa. 562, 237 A.2d 602 (1967); Delaware River Port Authority v. Pa. P. U. C., 393 Pa. 639, 145 A.2d 172 (1958).
It is relevant to the case now before us that the statutory array of PUC remedial and enforcement powers does not include the power to award damages to a private litigant for breach of contract by a public utility. Nor can we find an express grant of power from which the power to award such damages can be fairly implied. Thus, it can be concluded that the Legislature did not intend for the PUC to have such a power. This conclusion finds further support in Sections 917 and 1310 of the Public Utility Law. Section 917 states in pertinent part:
"Except as otherwise expressly provided, none of the powers or duties conferred or imposed by this act upon the commission . . . shall be construed in anywise to abridge or impair any of the obligations, duties or liabilities of any public utility . . . And except as otherwise provided, nothing in this act contained shall in any way abridge or alter the existing rights of action or remedies in equity or under the common or statutory law of the Commonwealth, it being the intention that the provisions of this act shall be cumulative and in addition to such rights of action and remedies."
Act of May 28, 1937, P.L. 1053, art. IX, § 917, 66 P.S. § 1357 (1959) (emphasis added). Section 1310 contains similar language:
If any person or corporation shall do or cause to be done any act, matter, or thing prohibited or declared to be unlawful by this act, or shall refuse, neglect, or omit to do any act, matter, or thing enjoined or required to be done by this act, such person or corporation shall be liable to the person or corporation injured thereby in the full amount of damages sustained in consequence thereof:
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that any person may complain to the PUC about the actions of a public utility, quoting the Act of May 28, 1937, as amended, Act of October 7, 1976, P.L. 1057, No. 215, § 19, P.L. 1053, art. X, 1001, 66 P.S. § 1391 (Supp.1977-78), a complaint by appellant to the PUC seeking damages could not have resulted in an award by the PUC even if that agency had determined the complaint to be meritorious. It is clear that the remedial and enforcement powers vested in the PUC by the Public Utility Law were designed to allow the PUC to enforce its orders and regulations but not to empower the PUC to award damages or to litigate a private action for damages on behalf of a complainant.*fn6 The rule requiring exhaustion of administrative remedies is not intended to set up a procedural obstacle to recovery; the rule should be applied only where the available administrative remedies are adequate with respect to the alleged injury sustained and the relief requested.*fn7 Philadelphia Life Insurance Co. v. Commonwealth, supra. In the instant case,
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appellant could not have been made whole by the PUC, thus the administrative remedy was not "adequate and complete." Id.*fn8
The decree of the Common Pleas Court dismissing appellant's complaint with prejudice is reversed and vacated and
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the cause is remanded for further proceedings consistent herewith.
Each party to bear own costs.
ROBERTS, Justice, dissenting.
Appellants Allen Feingold and A. L. Feingold Associates filed a complaint in equity in the Court of Common Pleas of Philadelphia, alleging that appellee Bell of Pennsylvania: (1) wrongfully disconnected a device designed to refer persons calling appellants to appellants' correct telephone number; (2) wrongfully disconnected appellants' telephone service upon discovering appellants had attached to their telephone a privately maintained answering service; and (3) wrongfully refused to provide appellants with mobile telephone service. Appellants sought compensatory and punitive damages along with injunctive relief. The court of common pleas entered an order dismissing appellants' complaint because appellants had failed to initiate this action before the proper administrative agency, the Public Utility Commission (PUC).
The majority reverses the order of the court of common pleas. It concludes that the trial court's adherence to the doctrine requiring proceedings to begin before the relevant administrative tribunal erects an unjustifiable procedural obstacle to recovery. The majority premises its holding on the ground that this case "merely raises the question of whether appellant[s'] alleged damages were proximately caused by a breach of a legal duty owed appellant[s] by appellee." According to the majority, such issues are traditionally disposed of by courts without the aid of administrative expertise.
I do not agree. The extent of appellee's obligations regarding telephone referral devices, the maintenance of service in the face of unauthorized connections, and mobile
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service are not at all obvious. The majority permits these unclear issues to be resolved in the court of common pleas. Such a result is an unwarranted departure from the sound doctrine which encourages the initial resolution of important issues to be made in the proper administrative forum. Accordingly I dissent.
The doctrine which requires proceedings involving a regulated enterprise to begin before the regulating agency promotes "proper relationships between the courts and administrative agencies charged with particular regulatory duties." United States v. Western Pacific R. Co., 352 U.S. 59, 63, 77 S.Ct. 161, 165, 1 L.Ed.2d 126 (1956). The regulatory agency has "primary jurisdiction" over such disputes so that uniform, consistent, and expert judgments can be rendered on specific issues. Davis, Administrative Law Treatise § 20.01 (Supp.1977). Such a tribunal, "by specialization, by insight gained through experience and by more flexible procedure," is better equipped than a court to make these judgments. Far East Conference v. United States, 342 U.S. 570, 574-75, 72 S.Ct. 492, 494, 96 L.Ed. 576 (1952). So that the administrative agency can discharge its responsibility, courts limit their involvement in the resolution of this class of disputes. See Texas & Pacific Ry. v. Abilene Cotton Oil Co., 204 U.S. 426, 27 S.Ct. 350, 51 L.Ed. 553 (1907); Schwartz, Administrative Law § 166 (1976).
These considerations apply with full force to cases falling within the regulatory domain of the PUC. In Behrend v. Bell Telephone Co. of Pennsylvania, 431 Pa. 63, 243 A.2d 346 (1968), a telephone subscriber sought to compel the publication of corrected telephone directories. We concluded that the proceeding should have been brought before the PUC:
"The Public Utility Commission has been vested by the Legislature with exclusive original jurisdiction over the reasonableness, adequacy and sufficiency of public utility services, including telephone services and directories.
In Lansdale Borough v. Philadelphia Electric Company, 403 Pa. 647, pages 650-651, 170 A.2d 565, page 566, the Court pertinently said (page 650): 'Although we still
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possess the right of judicial scrutiny over the acts of the PUC, no principle has become more firmly established in Pennsylvania law than that the courts will not originally adjudicate matters within the jurisdiction of the PUC. Initial jurisdiction in matters concerning the relationship between public utilities and the public is in the PUC -- not in the courts.'"
431 Pa. at 66-67, 243 A.2d at 347-48 (footnote deleted). Accord, Duquesne Light Co. v. Borough of Monroeville, 449 Pa. 573, 298 A.2d 252 (1972); Einhorn v. Philadelphia Electric Co., 410 Pa. 630, 190 A.2d 569 (1963).
The precise obligations of appellee in this case must be viewed in connection with appellee's duty to customers generally. This cannot be accomplished by interpreting statutory provisions. Many factors, all of which may have important effects on the public, the regulated enterprise, and those situated similarly to the person aggrieved, must be considered. Extending the obligations of a telephone company to encompass these circumstances may pose economic hardship or create a conflict in duties which cannot be detected by a court. A court's formalized proceedings may inhibit the discovery of information relevant to the technological capability of appellee to provide such services. Important facts can easily be overlooked because of a court's unfamiliarity with their significance. Because of their shortcomings, courts are relieved of such matters by the PUC.
By requiring the trial court to proceed to the merits of this case, the majority encourages the court to engage in exactly the kind of speculation the doctrine of primary jurisdiction was designed to eliminate. Moreover, the decision invites other persons similarly situated to submit to courts throughout the Commonwealth their grievances against appellee. These courts will have to render equally speculative judgments and will inevitably reach conflicting results. The orderly coordination of administrative adjudication will quickly be replaced by unneeded regulatory chaos.
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The majority justifies its decision to depart from the recognized doctrine of primary jurisdiction on the ground that the PUC provides appellants an insufficient remedy. The majority reasons that the interest in judicial economy is furthered by allowing a tribunal with full remedial powers to consider the dispute. What the majority ignores, however, is that the latter tribunal is not equipped to resolve the underlying issues in this controversy. Judicial economy, if any, comes only by paying the great price of having these regulatory issues decided in a haphazard, ad hoc, and inconsistent manner.
Whether a party asks for a remedy beyond the power of the relevant administrative agency does not control the question whether that agency has primary jurisdiction. Rather, that question is controlled by whether the administrative agency can clarify issues in dispute. Here, the PUC has knowledge, procedures, and experience which can enhance the resolution of appellee's duties. I believe that the trial court correctly recognized the need for the PUC's initial adjudication of the issues in this case.
I therefore dissent, and would affirm the order.
Mr. Justice ROBERTS also dissents from the order of the Court denying reargument. He would grant reargument for the reasons set forth in his dissenting opinion and the reasons urged in the Applications for Reargument filed by party-applicant Bell of Pennsylvania and amicus -applicants Public Utility Commission, Pennsylvania Electric Association, Pennsylvania Gas Association, Pennsylvania Independent Telephone Association, and Pennsylvania Power and Light Company.
POMEROY, Justice, dissenting.
I am convinced that the doctrine of primary administrative jurisdiction dictates that the Public Utility Commission (PUC) is best equipped to resolve initially such technical issues of administrative law as are here presented involving, as they do, the relationship of the public with the public utility companies. Thus I share in general the views expressed
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in the dissenting opinion of Mr. Justice ROBERTS. Our prior cases have not had occasion, however, to delineate with much precision the respective roles of administrative tribunals and the courts where, as here, multiple issues are presented, not all of which fall neatly within the primary jurisdiction of either an administrative agency or a court of law. I therefore add this separate statement as to my reasons for dissenting.
Allen Feingold and A. L. Feingold Associates filed a complaint in equity in the Court of Common Pleas of Philadelphia County seeking both injunctive relief and compensatory and punitive damages. No attempt to seek relief from the Public Utility Commission had been made. Applying the doctrine of primary administrative jurisdiction, the trial court dismissed the entire complaint with prejudice. This Court now reverses that determination and replaces total jurisdiction in the court of common pleas on the ground that the administrative remedy was not "adequate and complete." See Philadelphia Insurance Co. v. Commonwealth, 410 Pa. 571, 190 A.2d 111 (1963). I believe the proper response lies somewhere between the placement of this case exclusively in the domain either of the Commission or of the court. The functional division herein outlined would, I believe, be the proper application of the doctrine of primary administrative jurisdiction which, instead of creating mutually exclusive domains, would result in a workable relationship between the courts and the PUC.
It has long been recognized in Pennsylvania that the PUC is the body with "exclusive original jurisdiction over the reasonableness, adequacy and sufficiency of public utility services, including telephone services and directories." Behrend v. Bell Telephone Company of Pennsylvania, 431 Pa. 63, 66, 243 A.2d 346, 347 (1968). See also Duquesne Light Company v. Borough of Monroeville, 449 Pa. 573, 298 A.2d 252 (1972); Einhorn v. Philadelphia Electric Company, 410 Pa. 630, 190 A.2d 569 (1963); Lansdale Borough v. Philadelphia Electric Company, 403 Pa. 647, 170 A.2d 565 (1961). It is also true, as Mr. Justice NIX notes for the majority, that
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the doctrine of exclusive jurisdiction in the administrative tribunal will yield where the administrative remedy is inadequate. See Borough of Greentree v. Board of Property Assessments, 459 Pa. 268, 328 A.2d 819 (1974); Philadelphia Life Insurance Co. v. Commonwealth, supra. I cannot agree, however, that such a yielding is indicated where, as here, there is but a mere allegation of extra-statutory relief, and the granting of that relief is dependent upon a determination of issues which would normally fall within the exclusive jurisdiction of the PUC.*fn1
In the present case, appellant requests mandatory injunctive relief to compel the defendant to render legally adequate telephone service together with damages for failure to render adequate service in the past. Both types of relief are dependent upon a finding that service has been inadequate. A determination of whether the service and facilities rendered by a public utility is adequate, efficient, safe and reasonable is obviously within the competence of the Public
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Utility Commission; the making of such determinations is, indeed, one of the primary reasons for which the PUC was created. Act of May 28, 1937, P.L. 1053, art. IV, as amended, Act of October 7, 1976, P.L. 1057, No. 215, 66 P.S. § 1171 (Supp.1977-1978). And, of course, the PUC is endowed by the Public Utility Code with authority to enforce compliance by public utility companies with the standards of service to which legally the companies must adhere. See Act of May 28, 1937, P.L. 1053, art. IX, § 901, 66 P.S. § 1341 et seq. The PUC, accordingly, is the agency which the legislature has created both to interpret the standards of service of a public utility and to enforce them. The only power which the Commission lacks in the present case is the ability to award damages for past breaches of duty by the Telephone Company, assuming such breaches have occurred and entail damages. This lack, however, is not such as to oust the PUC of its primary jurisdiction. Resort to the courts may well be necessary at a later stage to pursue the quest for damages, based on PUC findings which will then be in hand. The majority, however, would virtually strip the PUC of all jurisdiction merely because a demand for damages is contained in appellant's complaint. Such a result is unwarranted.
The proper procedure in a case such as the instant one is, I suggest, to stay the proceeding in the court of common pleas until a determination of the questioned standards of service can be had by the PUC in accordance with Section 412 of the Public Utility Code (66 P.S. § 1182).*fn2 This course of procedure
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is necessary because the dispute is uniquely within the expertise of the PUC; it is only the relief sought, i. e., the allowance of damages, which is beyond the legislative grant of powers to the Commission. The proposition is succinctly put in Professor Davis' authoritative treatment of administrative law:
"(1) On the question whether the doctrine [of primary administrative jurisdiction] applies to problems or relief which are beyond administrative jurisdiction, the theory seems reasonably clear. The test is not whether some parts of the case are within the exclusive jurisdiction of the courts; the test is whether some parts of the case are within the exclusive jurisdiction of the agency. Because of the purpose of the doctrine -- to assure that the agency will not be by-passed on what is especially committed to it -- and because resort to the courts is still open after the agency has acted, the doctrine applies even if the agency has no jurisdiction to grant the relief sought." (Emphasis added.)
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Davis, Administrative Law Treatise, § 19.07, p. 39 (1958). See also Davis, Administrative Law of the Seventies, § 19.07, pp. 444-45 (1976); Annotation, Doctrine of Primary Administrative Jurisdiction as Defined and Applied by the Supreme Court, 38 L.Ed.2d 796, § 8 (1974); Jaffe, Judicial Control of Administrative Action, pp. 138-39 (1965). Accord: United States v. Michigan National Corp., 419 U.S. 1, 5, 95 S.Ct. 10, 12, 42 L.Ed.2d 1, 5 (1974); Pan American World Airways, Inc. v. United States, 371 U.S. 296, 313, n. 19, 83 S.Ct. 476, 486 n. 19, 9 L.Ed.2d 325, 337, n. 19 (1963); Hewitt-Robins v. Eastern Freight-Ways, Inc., 371 U.S. 84, 83 S.Ct. 157, 9 L.Ed.2d 142 (1963);*fn3 Elkins v. Bell Telephone Co., 247 Pa. Super. 505, 372 A.2d 1203 (1977). The position endorsed by the majority will, I fear, inevitably lead to varying and contradictory interpretations of obligations or standards of service which would not be applied uniformly or consistently throughout the regulated field. Such a result would frustrate one of the legislative purposes in creating the Public Utility Commission.*fn4 The need for uniformity and consistency is a major objective of the primary
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jurisdiction concept, as the Supreme Court of the United States recently observed in Nader v. Allegheny Airlines, 426 U.S. 290, 303-04, 96 S.Ct. 1978, 1987, 48 L.Ed.2d 643, 655 (1976):
"Even when common-law rights and remedies survive and the agency in question lacks the power to confer immunity from common-law liability, it may be appropriate to refer specific issues to an agency for initial determination where that procedure would secure '[u]niformity and consistency in the regulation of business entrusted to a particular agency' or where
'the limited functions of review by the judiciary [would be] more rationally exercised, by preliminary resort for ascertaining and interpreting the circumstances underlying legal issues to agencies that are better equipped than courts by specialization, by insight gained through experience, and by more flexible procedure.' Far East Conference v. United States, 342 U.S. at 570, 574-575, 72 S.Ct. 492, 96 L.Ed. 576.
See also United States v. Western Pacific R. Co., supra, 352 U.S. 59 at 64, 77 S.Ct. 161, 1 L.Ed.2d 126.
"The doctrine [of primary jurisdiction] has been applied, for example, when an action otherwise within the jurisdiction of the court raises a question of the validity of a rate or practice included in a tariff filed with an agency, e. g., Danna v. Air France, 463 F.2d 407 (CA 2 1972); Southwestern Sugar & Molasses Co. v. River Terminals Corp., 360 U.S. 411, 417-418, 79 S.Ct. 1210, 1214-1215, 3 L.Ed.2d 1334, 1340-1341 (1959), particularly when the issue involves technical questions of fact uniquely within the expertise and experience of an agency -- such as matters turning on an assessment of industry conditions, e. g., United States v. Western Pacific R. Co., supra, 352 U.S. at 66-67, 77 S.Ct. 161, 1 L.Ed.2d 126."
Once the administrative tribunal has determined the issues within its jurisdiction, then the temporarily suspended civil
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litigation may continue. The direction and scope of the litigation will of course be guided and determined by the nature of the agency adjudication.*fn5
I do not believe that such a disposition of the present case or of similar cases creates any undue hardship on any of the parties, nor do I agree with the Court that such an initial resolution at the administrative level sets up "a procedural obstacle to recovery." Rather, the present case presents a classic illustration of an instance where a balancing of the roles of the courts and administrative tribunals is necessary to insure fairness to the parties while effectuating the public concern that utility companies be regulated in an efficient and consistent manner.
I would vacate the order of the trial court and stay further action on the complaint until such time as the PUC has had an opportunity to rule on the adequacy of service which serves as the basis of the present action. Hence, this dissent.