Utah counties challenging property-tax reimbursements to Qwest Communications International Inc. will get a chance to make their case before the state Public Service Commission, but just when and how has yet to be determined.
At the end of a Tuesday hearing, the commission rejected a Qwest motion to dismiss the matter, which involves $16.9 million in taxes collected from 1988 through 1996.
"We are not in a position to narrow precisely how we are going to go forward," commission Chairman Stephen Mecham said.
He urged the parties to meet and discuss ways to proceed, and he said the state Committee of Consumer Services should be included in the discussions.
Twenty-seven counties are involved in the complaint. They contend that Qwest and its predecessor companies received $16.9 million in appeals made to the State Tax Commission. But the company's customers already had paid that amount because those taxes were part of the company's rate structure, and customers should get that money back, the counties believe.
The counties had filed a class-action suit with the 3rd District Court. After that was dismissed, they took their case to the Utah Supreme Court. That court in September ruled that the Public Service Commission was the sole and exclusive forum for the complaint.
But Qwest said Tuesday that the way the complaint was written — as common-law equitable claims — put it out of the commission's jurisdiction.
"The underlying ground for Qwest's motion to dismiss is a fairly simple point — that the single cause of action that has been pled by the counties in this case, the unjust enrichment claim — is a common-law equitable claim that is not within the jurisdiction of the commission and therefore the case must be dismissed," Qwest attorney Ted Smith said.
He added that the counties have acknowledged they do not have a ratemaking claim and instead are trying say they are the equitable owner of those taxes.
However, Smith said, the PSC has no statutory authority over equity issues. "In their complaint, there's not a single citation to a Utah statute that grants the commission the jurisdiction over that kind of claim," Smith said.
David Scofield, an attorney for the counties, said Qwest was arguing about the form of the claim instead of its subject matter.
"You can pull snippets out of the (Supreme Court) case and read it however you want, but the ultimate ruling of that court was that this commission has exclusive jurisdiction over the claims that the counties asserted before the District Court," he said.
Scofield said the commission is an equitable entity by the nature of its work.
"I think it's a mistake to get hung up on this 'straw man' premise that there's some equitable jurisdiction that can't be exercised by this commission in conjunction with its actually delegated and granted authority," he said.
Kent Walgren, a state Division of Public Utilities attorney, said the division agreed with Qwest that the commission does not have equity jurisdiction and Qwest's interpretation of the Supreme Court opinion that the court never meant to grant the commission broader powers.
"In the end, we concluded that in order to grant the relief the counties are requesting, it would really be necessary to create new law out of the whole cloth, and that is not something that is part of the mission of the division," Walgren said.