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Francis Sheffler et al v. Commonwealth Edison Company

June 16, 2011

FRANCIS SHEFFLER ET AL.,
APPELLANTS,
v.
COMMONWEALTH EDISON COMPANY,
APPELLEE.



The opinion of the court was delivered by: Justice Thomas

JUSTICE THOMAS delivered the judgment of the court, with opinion.

Chief Justice Kilbride and Justices Freeman, Garman, Karmeier, Burke, and Theis concurred in the judgment and opinion.

OPINION

Plaintiffs, Frances Sheffler, Mark Resnik, and Debra Sloan, individually and on behalf of Jason Sloan, filed a complaint on behalf of a putative class against defendant, Commonwealth Edison Company (ComEd), seeking damages and injunctive relief for power outages to their homes following severe storms. Plaintiffs filed an initial complaint, followed by a first, second and third amended complaint. The circuit court dismissed plaintiffs' third amended complaint with prejudice, and denied plaintiffs leave to file a fourth amended complaint. On appeal, the Appellate Court, First District, affirmed. 399 Ill. App. 3d 51.

This court granted plaintiffs' petition for leave to appeal. Ill. S. Ct. R. 315 (eff. Feb. 26, 2010). In addition, pursuant to Illinois Supreme Court Rule 345 (eff. Sept. 20, 2010), we allowed the Village of Deerfield to file a brief amicus curiae on behalf of plaintiffs. We also permitted the Peoples Gas Light and Coke Company, North Shore Gas Company and Northern Illinois Gas Company, d/b/a Nicor Gas Company, to file a brief amici curiae on behalf of defendant.

BACKGROUND

On August 23, 2007, severe storm systems affected the Chicago area, resulting in the loss of electrical power to many of ComEd's customers, including plaintiffs. As a result of the power outages, plaintiffs filed their complaint and amended complaints. The original complaint was filed on August 28, 2007. That complaint was filed by plaintiffs Sheffler and Resnik as a class action complaint.

Count I of the original complaint was brought under the Public Utilities Act (the Act) (220 ILCS 5/5--101 et seq. (West 2006)) and alleged that ComEd had a duty to act as a reasonably careful public utility to provide continuous power to plaintiffs and the putative class members. Plaintiffs alleged that ComEd was negligent in that it failed to provide continuous, adequate, efficient and reliable power to plaintiffs and the putative class, failed to provide adequate warning prior to the power outage, and failed to adequately maintain its facilities to provide continuous, adequate, efficient and reliable power to plaintiffs and to the putative class. Plaintiffs alleged that ComEd breached its duties because its company-wide manpower planning process is inadequate, its distribution system did not keep pace with system growth and the need for refurbishment, and the distribution system became excessively loaded and did not adequately allow for contingencies for a failure. Plaintiffs contended that ComEd's negligence and failure to act directly and proximately caused the power outages, and caused plaintiffs and the putative class members to suffer property damage and other financial damages. Plaintiffs requested a temporary restraining order and/or a preliminary injunction "enjoining COMED from its practice of attempting to unilaterally settle the claims such as herein and requiring the Plaintiffs and the class to sign a release of all said claims with respect thereto."

Count II of the original complaint was for breach of contract implied in law or fact. Plaintiffs alleged that ComEd impliedly agreed to provide continuous, adequate, efficient and reliable electric service to plaintiffs and the class, that plaintiffs and the class paid ComEd for their electric service, but ComEd breached the contract implied in law or fact by failing to provide such electric service.

On September 19, 2007, plaintiffs were given leave to file an amended class action complaint, which also added plaintiff Debra Sloan, individually and as legal guardian of Jason Sloan. The first amended complaint contained four counts. Count I was again brought under the Act seeking a temporary restraining order and/or preliminary injunction, and added claims that ComEd was negligent in failing to provide priority to disabled persons in restoring their power after a power outage or interruption, and in failing to establish and provide priority power to persons registered in ComEd's life support registry (see 220 ILCS 5/8--204 (West 2006)). Count II again alleged a breach of contract implied in law or fact.

Count III of the first amended complaint sought an injunction on behalf of the Sloan class. Count III alleged that plaintiff Sloan was the parent and legal guardian of Jason Sloan, a disabled adult, who required the use of a ventilator to breathe 24 hours a day, and who required pacemakers in both his lungs and his heart. Plaintiffs alleged that Sloan was registered in ComEd's life support registry and that Sloan lost her electrical power on August 23, 2007. Sloan connected her son to a temporary generator and telephoned ComEd about the loss of power. Plaintiffs alleged that the ComEd representative was rude and dismissive. Moreover, due to the power outage, Sloan's basement flooded, causing her back-up generator to fail.

Count III further alleged that ComEd refused to give any priority to restoring power to Sloan's residence, refused any assistance to Sloan, and would not give Sloan an anticipated time that her power would be restored. Plaintiffs further alleged that ComEd, in breach of its duty of care to plaintiff and its other customers on the life support registry, failed to warn that in the event of an outage, ComEd would not act to restore power to sustain their life support systems. Plaintiffs sought a temporary restraining order and/or a preliminary injunction enjoining ComEd from refusing to respond on a priority basis to immediately restore power, and from refusing to offer assistance to persons registered in their life support registry. Count IV of plaintiffs' complaint sought a declaratory judgment on behalf of the Sloan class.

ComEd thereafter filed a motion to dismiss the first amended complaint pursuant to section 2--615 of the Code of Civil Procedure (the Code) (735 ILCS 5/2--615 (West 2006)). On November 8, 2007, the circuit court dismissed counts III and IV of the first amended complaint, and struck counts I and II, with leave to replead.

Plaintiffs filed their second amended complaint on December 6, 2007. The second amended complaint contained five counts. Count I alleged negligence, claiming that ComEd had a duty to act as a reasonably careful public utility to provide continuous power to plaintiffs and the putative class members, to prevent controllable interruptions or loss of power, to provide adequate, efficient, reliable, just, reasonable and environmentally safe service, to promote the safety, health, comfort and convenience of its customers, and to properly maintain and publicize a life support registry. Plaintiffs alleged that ComEd wantonly, carelessly and negligently acted or failed to act in breach of its duties. Plaintiffs alleged that, as a result of ComEd's negligence, they sustained damages in the form of spoiled food, water damage to walls, furniture, fixtures, appliances, furnace and water heaters, medical and electrical equipment, and repair costs.

Count II of the second amended complaint was brought under the Act, and again sought a temporary restraining order and/or a preliminary injunction enjoining ComEd from its "practice and policy of unilaterally settling claims and requiring the Plaintiffs and the Class members to sign a release of all claims, demands and causes of action with respect to the power outage of August 23, 2007 and thereafter, as alleged herein." Count III again alleged a breach of contract implied in law or fact, and count IV sought an injunction, enjoining ComEd "from its practice of refusing to respond on a priority basis to immediately restore power, refusing to offer assistance to persons registered in their Life Support Registry, or, minimally, providing persons registered in their Life Support Registry regular and frequent updates as to when it is anticipated that power will be restored, if at all."

Finally, count V of the second amended complaint sought a declaratory judgment determining the rights of the parties "including without limitation as to the propriety of ComEd's alleged refusal to respond on a priority basis to immediately (or otherwise) restore power, refusal to offer assistance to persons registered in their Life Support Registry, failure to provide persons registered in their Life Support Registry regular and frequent updates as to when it is anticipated that power will be restored, if at all, publication of the Life Support Registry, and sharing of the Life Support Registry with rescue/emergency response authorities." Plaintiffs also sought a declaratory judgment concerning ComEd's obligations to repair and maintain power and related equipment, and to plan for and respond to outages.

ComEd filed a motion to dismiss the second amended complaint pursuant to section 2--615. The circuit court struck counts I, II and III of plaintiff's second amended complaint, with leave to replead. The circuit court dismissed counts IV and V without leave to replead.

On August 4, 2008, plaintiffs filed their third amended complaint, the complaint at issue in this case. The third amended complaint contained five counts. Count I alleged negligence, count II alleged a violation of the Act, count III alleged breach of contract implied in law/fact, count IV sought an injunction, and count V alleged a violation of the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 2006)). The relevant allegations of the third amended complaint are discussed infra.

ComEd moved to dismiss plaintiffs' third amended complaint pursuant to sections 2--615 and 2--619 of the Code. The circuit court granted ComEd's motion to dismiss plaintiffs' third amended complaint in its entirety with prejudice pursuant to section 2--615. The circuit court stated that:

"what is actually at issue here is that what this lawsuit is about and what the plaintiffs' theory of the case is is [sic] that they are actually seeking relief based on systematic defects in the provision of the electrical services or in the repair of those services once an outage occurs. And in the Court's view, these are the type of broad-based allegations and claims that can't survive as a matter of law. *** [T]he allegations at their core are very much like the allegations in the Lewis E. v. Spagnolo case [186 Ill. 2d 198 (1999)]. *** The complaint is really looking for relief that whether it's characterized as damages relief or there is a count for injunctive or declaratory relief or an action under the Consumer Fraud Act, the bottom line is that the plaintiffs' allegations go to the way Commonwealth Edison provides services and the adequacy of its response when those services fail for whatever multitude of reasons may exist. I don't think the law provides a relief for the kinds of claims that are stated ***."

In affirming the circuit court, the appellate court first addressed the propriety of the circuit court's order dismissing the portions of plaintiffs' complaint seeking injunctive relief. The appellate court held that plaintiffs' complaint clearly sought an adjudication of ComEd's level of service and its response to a power outage when an outage occurs. 399 Ill. App. 3d at 66. The appellate court held that the injunctive relief requested by plaintiffs was properly addressed by the Illinois Commerce Commission (the Commission) and not the circuit court. Id. at 67. Further, even if those claims were properly before the circuit court, the circuit court did not err in dismissing those claims pursuant to Lewis E. v. Spagnolo, 186 Ill. 2d 198 (1999). As in Spagnolo, plaintiffs' requests for injunctive relief sought to prevent some unspecified injuries or damages to them that had not occurred and might never occur. 399 Ill. App. 3d at 67.

With regard to plaintiffs' claims for legal relief, the appellate court held that the relief sought by plaintiffs implicated rates, as those claims related directly to the Commission's rate-setting functions for electrical power services. 399 Ill. App. 3d at 69. The appellate court concluded that plaintiffs' prayer for relief pertaining to damages was predicated on allegations that ComEd was not providing adequate service under the Act. Id. at 70. If those claims were allowed to proceed in the circuit court, the circuit court would be placed in the position of assessing what constitutes adequate service and whether ComEd fulfilled its responsibility of providing adequate services. Id. Noting that it could affirm the circuit court's dismissal on any basis in the record, the appellate court held that plaintiffs' complaint was properly dismissed because the circuit court did not have jurisdiction of the complaint, which is a ground for dismissal under section 2--619(a)(1) of the Code.

The appellate court also held that plaintiffs' claim for damages was barred by the decision in In re Illinois Bell Switching Station Litigation, 161 Ill. 2d 233 (1994). 399 Ill. App. 3d at 70. As in that case, the plaintiffs' claims were barred by ComEd's tariff, so that the circuit court did not have jurisdiction over those claims. Id. at 73.

Finally, the appellate court held that the circuit court did not abuse its discretion in denying plaintiffs leave to file a fourth amended complaint. 399 Ill. App. 3d at 76. The proposed fourth amended complaint contained one count alleging that ComEd violated section 16--125 of the Act (220 ILCS 5/16--125 (West 2006)). The appellate court found that jurisdiction over the damage remedies under section 16--125 is in the Commission and not the circuit court. Id.

ANALYSIS

On appeal, plaintiffs challenge the appellate court's decision affirming the circuit court's dismissal of plaintiffs' third amended complaint and the circuit court's denial of plaintiffs' motion for leave to file a fourth amended complaint. Specifically, plaintiffs argue that the appellate court erred in finding that their claims for money damages fell within the Commission's jurisdiction. Plaintiffs also argue that the lower courts erred in finding that their allegations concerning the life support registry did not state a claim. Finally, plaintiffs argue that the circuit court abused its discretion in denying them leave to file their fourth amended complaint. Plaintiffs do not challenge the dismissal of their claims for injunctive relief.

We first address plaintiffs' claim that the appellate court erred in finding that plaintiffs' third amended complaint was properly dismissed because the circuit court did not have jurisdiction to hear plaintiffs' case. This court reviews decisions granting motions to dismiss pursuant to section 2--619 de novo. Solaia Technology, LLC v. Specialty Publishing Co., 221 Ill. 2d 558, 579 (2006).

With regard to plaintiffs' legal claims, the appellate court held that the portion of plaintiffs' complaint seeking money damages in essence alleged that ComEd's level of service and restoration efforts following a power outage are substandard. 399 Ill. App. 3d at 69. The appellate court held that those claims directly related to the Commission's rate-setting functions for electrical power services, fundamentally alleging that ComEd should provide its customers a greater level of service, which raised a regulatory question of how ComEd should recover the costs of raising the level of service it provides. Id. The appellate court concluded that questions of how ComEd should effectuate an improvement in service and whether ComEd's customers should pay more for the electrical services provided by ComEd fell squarely within the Commission's jurisdiction over rates. Id.

In so holding, the appellate court noted that ComEd's filed tariff specifically stated "that when 'larger, more, or different' services or facilities are requested, the Commission must determine whether the improvements would be 'reasonably and technically feasible' without having a significant adverse impact on the reliability and efficiency of ComEd's overall system." 399 Ill. App. 3d at 70 (quoting Ill. Com. Comm'n No. 10, Orig. Sheet No. 20). Allowing plaintiffs' claims to proceed would place the circuit court in the position of having to determine what constitutes adequate service, as well as whether ComEd fulfilled its responsibilities of providing adequate service, a determination within the Commission's jurisdiction pertaining to rates. 399 Ill. App. 3d at 70.

Finally, the appellate court held that plaintiffs' claims for damages were barred by the decision in Illinois Bell Switching Station, 161 Ill. 2d 233, where the court held that the plaintiffs' lawsuit was barred by the defendant's tariff. 399 Ill. App. 3d at 70. The appellate court found that, like the Illinois Bell Switching Station case, the plaintiffs' claims in this case were barred by ComEd's tariff, which limited ComEd's liability for any failure to supply electricity, or for interruption or reversal of the supply of electricity. Id. at 73.

In this court, plaintiffs argue that the lower courts have now held that virtually any challenge to ComEd's services that result in damages is automatically deemed a challenge to the way that ComEd does business, so that those claims must be adjudicated by the Commission. Plaintiffs maintain, however, that suits for compensatory damages are properly brought in the circuit court.

As noted, in addition to finding that plaintiffs' legal claims fell within the Commission's jurisdiction over rates, the appellate court also found that plaintiffs' legal claims were barred by ComEd's tariff. Setting utility rates is a legislative function. People ex rel. Hartigan v. Illinois Commerce Comm'n, 117 Ill. 2d 120, 142 (1987). A tariff is a public document setting forth services being offered, the rates and charges with respect to services, and the governing rules, regulations, and practices relating to those services. Adams v. Northern Illinois Gas Co., 211 Ill. 2d 32, 55 (2004). Section 9--102 of the Act requires public utilities such as ComEd to file tariffs with the Commission. 220 ILCS 5/9--102 (West 2006). Generally a tariff is drafted by the regulated utility, but when the tariff is duly filed with the Commission, the tariff binds the utility and the customer, and governs their relationship. Adams, 211 Ill. 2d at 55. Once the Commission approves a tariff, the tariff " 'is a law, not a contract, and has the force and effect of a statute.' " Id. (quoting Illinois Central Gulf R.R. Co. v. Sankey Brothers, Inc., 67 Ill. App. 3d 435, 439 (1978)).

Tariff provisions are usually referred to as liability limitations, which reflect the status of public utilities as regulated monopolies whose operations are subject to extensive restrictions, the requirements of uniform, nondiscriminatory rates, and the goal of universal service, achieved through the preservation of utility prices that virtually all customers can afford. Adams, 211 Ill. 2d at 56-57. The theory underlying liability limitations is because a public utility is strictly regulated, its liability should be defined and limited ...


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