Markley v. Department of Public Utility Control
23 A.3d 668, 2011 Conn. LEXIS 190, 301 Conn. 56 (2011)
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Rule of Law:
To overcome the state's sovereign immunity based on exceptions for unconstitutional or extrastatutory conduct, a plaintiff's complaint must allege sufficient facts to support a substantial claim of such conduct. Merely alleging that a state officer's actions were unconstitutional or exceeded statutory authority is insufficient without a proper factual basis.
Facts:
- In 1998, Connecticut's electric market deregulation allowed two investor-owned distributors, Connecticut Light and Power Company (CL&P) and United Illuminating Company (United), to charge their customers a 'competitive transition assessment' fee to recoup 'stranded costs'.
- This fee was scheduled to expire on December 31, 2010, for CL&P customers and October 1, 2013, for United customers.
- Customers of nonprofit municipal electric utilities were not required to pay this fee.
- In 2010, facing a budget deficit, the Connecticut General Assembly enacted Public Act 10-179, authorizing the state to issue 'economic recovery revenue bonds'.
- P.A. 10-179 required the Department of Public Utility Control (department) to issue a financing order that continued assessing the fee on CL&P and United customers beyond its original expiration date.
- The proceeds from this continued fee would be transferred to the state's general fund to address the budget deficit.
- The law directed the department to allocate the financial burden 'equitably' between the customers of the two distributors.
- Joe Markley, an electric utility ratepayer, was subject to this continued fee.
Procedural Posture:
- Joe Markley (plaintiff) sued the department of public utility control and its chairman, Kevin DelGobbo (defendants), in a state trial court, seeking to enjoin the enforcement of a financing order.
- The defendants filed a motion to dismiss, asserting that the action was barred by sovereign immunity.
- The plaintiff filed an amended complaint, adding claims that the order violated his constitutional right to equal protection.
- The trial court granted the defendants' motion to dismiss the entire action, finding it lacked subject matter jurisdiction due to the plaintiff's failure to exhaust administrative remedies and, alternatively, because the claims were likely barred by sovereign immunity.
- The plaintiff-appellant, Joe Markley, appealed the dismissal to the Appellate Court.
- The Supreme Court of Connecticut then granted the motion of the defendants-appellees to transfer the appeal directly to itself.
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Issue:
Are a ratepayer's claims seeking to enjoin a state agency's financing order barred by the doctrine of sovereign immunity when the complaint fails to allege sufficient facts to support a substantial claim of unconstitutional or extrastatutory state action?
Opinions:
Majority - Rogers, C. J.
Yes, the ratepayer's claims are barred by sovereign immunity because the complaint does not allege sufficient facts to support a substantial claim that the state acted unconstitutionally or in excess of its statutory authority. Sovereign immunity shields the state and its officers from suit unless an exception applies. To invoke the exceptions for unconstitutional or extrastatutory acts, a plaintiff must do more than make conclusory allegations; the complaint must contain facts that 'clearly demonstrate' such violations. Here, the plaintiff's equal protection claim fails because legislative classifications in taxation schemes are subject to a deferential rational basis review. The state had a rational basis for the fee: to raise revenue for a budget deficit without increasing ratepayers' existing monthly bills. The plaintiff's statutory claim fails because the department's authority to issue the order came directly from the new statute, P.A. 10-179, which overrides any perceived limitations in its general enabling statute. The plaintiff's other statutory arguments were not considered as they were improperly raised for the first time in a reply brief.
Analysis:
This decision reinforces the high jurisdictional hurdle of sovereign immunity and clarifies the pleading standard required to overcome it. It affirms that a plaintiff cannot merely invoke exceptions for unconstitutional or extrastatutory conduct but must plead specific, non-conclusory facts to support a 'substantial claim.' The ruling also underscores the judiciary's significant deference to legislative decisions in economic and taxation matters under the rational basis standard of review. Procedurally, the case serves as a strict reminder that appellate courts will generally not consider legal arguments raised for the first time in a reply brief, thereby emphasizing the importance of preserving all claims at the trial level and in initial appellate filings.
