5VAC5-20 State Corporation Commission Rules of Practice and Procedure

REGULATIONS

Vol. 27 Iss. 21 - June 20, 2011

TITLE 5. CORPORATIONS

STATE CORPORATION COMMISSION

Chapter 20

Proposed Regulation

REGISTRAR'S NOTICE: The State Corporation Commission is exempt from the Administrative Process Act in accordance with § 2.2-4002 A 2 of the Code of Virginia, which exempts courts, any agency of the Supreme Court, and any agency that by the Constitution is expressly granted any of the powers of a court of record.

Title of Regulation: 5VAC5-20. State Corporation Commission Rules of Practice and Procedure (amending 5VAC5-20-260, 5VAC5-20-280).

Statutory Authority: § 12.1-13 of the Code of Virginia.

Public Hearing Information:

July 12, 2011 - 10 a.m. - State Corporation Commission, Tyler Building, 1300 East Main Street, 2nd Floor, Richmond, VA

Public Comment Deadline: July 5, 2011.

Agency Contact: Scott White, Deputy General Counsel, Financial Services, State Corporation Commission, 1300 East Main Street, P.O. Box 1197, Richmond, VA 23218, telephone [phone], FAX [phone], or email [e-mail].

Summary:

The proposed revisions to 5VAC5-20-260 and 5VAC5-20-280 of the State Corporation Commission's Rules of Practice and Procedure modify the opportunity for parties and the commission staff to obtain discovery in regulatory and adjudicatory proceedings. Some revisions are proposed to provide for additional discovery of the commission staff and the commission staff's experts in regulatory proceedings. Other revisions are proposed to permit the expansion of discovery regarding witnesses and items of evidence in adjudicatory proceedings.

AT RICHMOND, MAY 26, 2011

COMMONWEALTH OF VIRGINIA, ex rel.

STATE CORPORATION COMMISSION

CASE NO. CLK-2011-00001

Ex Parte: In the matter concerning revised
State Corporation Commission Rules of
Practice and Procedure

ORDER FOR NOTICE AND HEARING TO
CONSIDER PROPOSED REVISIONS TO PART IV OF
THE COMMISSION'S RULES OF PRACTICE AND PROCEDURE

On January 11, 2011, the State Corporation Commission ("Commission") issued its Order for Notice of Proceeding to Consider Revisions to the Commission's Rules of Practice and Procedure ("Order for Notice of Proceeding") in this case. The Commission determined that it was appropriate to revisit Part IV of the Rules of Practice and Procedure, 5 VAC 5-20-10 et seq. ("Rules"), to consider issues related to discovery in Commission proceedings. The Commission invited interested parties to address, among other things, whether: (i) Commission Staff should be subject to additional discovery and, if so, what types of additional discovery and in what types of proceedings;¹ and (ii) whether experts or consultants retained by Commission Staff should be subject to discovery and, if so, what types of discovery and in what types of proceedings. The Commission also invited interested parties to address how subjecting Commission Staff to additional discovery may affect: (i) the Commission's ability to meet statutory deadlines in certain types of proceedings; (ii) available resources and efficiency in handling cases; (iii) the Commission Staff's ability to interact informally with regulated entities and their customers to effect resolution of disputes; (iv) the ability of the Commission's Staff to work with regulated entities in competitive industries; and (v) the protection of sensitive information provided to the Commission Staff by regulated entities.

The Commission received eight comments in response to its Order for Notice of Proceeding. The Virginia Committee for Fair Utility Rates and the Old Dominion Committee for Fair Utility Rates, representing large industrial customers, filed comments in support of maintaining the Commission's existing Rules. The following filed comments suggesting revisions to the Rules: Columbia Gas of Virginia, Inc., Washington Gas Light Company, Verizon Virginia Inc. and Verizon South Inc., and the Virginia Telecommunications Industry Association ("VTIA"). One individual filed comments adopting the position of the VTIA. The Office of Attorney General, Division of Consumer Counsel, filed a Notice of Participation, but raised no concerns with the current Rules. Shenandoah Valley Electric Cooperative filed comments in support of electronic filing and management of documents.

On April 8, 2011, the Commission Staff ("Staff") filed its Response to the comments filed herein, addressing the necessity for the suggested revisions. The Staff noted that no electric, water, or sewer utilities filed comments raising concerns with the Commission's Rules, nor did any companies or individuals associated with the financial services industry.

NOW THE COMMISSION, having considered this matter, is of the opinion and finds that certain revisions to Part IV of the Rules should be considered ("Proposed Rules"); that public notice and an opportunity for comment on the Proposed Rules should be given; and that a hearing should be convened to hear oral comment on the Proposed Rules. A copy of the Proposed Rules is attached hereto. The Commission's Division of Information Resources is directed to cause the Proposed Rules to be published in the Virginia Register of Regulations and to make the Proposed Rules available for inspection on the Commission's website.

Accordingly, IT IS ORDERED THAT:

(1) The Commission's Division of Information Resources shall forward this Order to the Registrar of Regulations for publication in the Virginia Register of Regulations.

(2) The Commission's Division of Information Resources shall make a downloadable version of the Proposed Rules available for access by the public at the Commission's website, http://www.scc.virginia.gov/case. The Clerk of the Commission shall make a copy of the Proposed Rules available, free of charge, in response to any written request for one.

(3) A public hearing shall be convened on July 12, 2011, at 10 a.m., in the Commission's Courtroom, Second Floor, Tyler Building, 1300 East Main Street, Richmond, Virginia, to receive oral comment from any interested persons on the Proposed Rules.

(4) Commission Staff and interested persons wishing to comment on the Proposed Rules may also file an original and fifteen (15) copies of any such comments with the Clerk, State Corporation Commission, 1300 East Main Street, Richmond, Virginia 23219, on or before July 5, 2011, making reference to Case No. CLK-2011-00001. Interested persons desiring to submit comments electronically may do so by following the instructions available at the Commission's website, http://www.scc.virginia.gov/caseinfo.htm.

(5) This matter is continued for further order of the Commission.

AN ATTESTED COPY hereof shall be sent by the Clerk of the Commission to all public utilities providing service within the Commonwealth of Virginia and to representatives of the insurance, banking, and securities industries as shown on the attached appendices and to the individuals and organizations on the service list attached hereto.

_______________________________________

¹ The Rules currently provide for some discovery of Staff in adjudicatory proceedings in Rule 280. Additionally, the Rules require Commission Staff to file workpapers supporting its recommendations in actions pursuant to Rule 80 A.

5VAC5-20-260. Interrogatories to parties or requests for production of documents and things.

The commission staff and any party in a formal proceeding before the commission, other than a proceeding under 5VAC5-20-100 A, may serve written interrogatories or requests for production of documents upon a party, to be answered by the party served, or if the party served is an entity, by an officer or agent of the entity, who shall furnish to the staff or requesting party information as is known. Interrogatories or requests for production of documents, including workpapers pursuant to 5VAC5-20-270, that cannot be timely answered before the scheduled hearing date may be served only with leave of the commission for good cause shown and upon such conditions as the commission may prescribe. Such otherwise untimely interrogatories or requests for production of documents, including workpapers pursuant to 5VAC5-20-270, may not be served until such leave is granted. No interrogatories Interrogatories or requests for production of documents may be served upon a member of the commission staff except, or an expert or consultant filing testimony on behalf of the commission staff, in a proceeding under 5 VAC 5-20-80 to discover: (i) factual information that supports the workpapers submitted by the staff pursuant to 5VAC5-20-270, including electronic spreadsheets that include underlying formulas and assumptions; (ii) any other documents relied upon as a basis for recommendations or assertions in prefiled testimony, staff reports or exhibits filed by staff, or by an expert or consultant filing testimony on behalf of the staff; or (iii) the identity of other formal proceedings in which an expert or consultant filing testimony on behalf of the staff testified regarding the same or a substantially similar subject matter. The disclosure of communications within the commission shall not be required and, except for good cause shown, no interrogatories or requests for production of documents may be served upon a member of the commission staff, or an expert or consultant filing testimony on behalf of the staff, prior to the filing of staff's testimony. All interrogatories and requests for production of documents shall be filed with the Clerk of the Commission. Responses to interrogatories and requests for production of documents shall not be filed with the Clerk of the Commission.

The response to each interrogatory or document request shall identify by name the person making the response. Any objection to an interrogatory or document request shall identify the interrogatory or document request to which the objection is raised, and shall state with specificity the basis and supporting legal theory for the objection. Objections shall be served with the list of responses or in such manner as the commission may designate by order. Responses and objections to interrogatories or requests for production of documents shall be served within 10 days of receipt, unless otherwise ordered by the commission. Upon motion promptly made and accompanied by a copy of the interrogatory or document request and the response or objection that is subject to the motion, the commission will rule upon the validity of the objection; the objection otherwise will be considered sustained.

Interrogatories or requests for production of documents may relate to any matter not privileged, which is relevant to the subject matter involved, including the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things, and the identity and location of persons having knowledge of evidentiary value. It is not grounds for objection that the information sought will be inadmissible at the hearing if the information appears reasonably calculated to lead to the discovery of admissible evidence.

Where the response to an interrogatory or document request may only be derived or ascertained from the business records of the party questioned, from an examination, audit, or inspection of business records, or from a compilation, abstract, or summary of business records, and the burden of deriving or ascertaining the response is substantially the same for one entity as for the other, a response is sufficient if it (i) identifies by name and location all records from which the response may be derived or ascertained; and (ii) tenders to the inquiring party reasonable opportunity to examine, audit, or inspect the records subject to objection as to their proprietary or confidential nature. The inquiring party bears the expense of making copies, compilations, abstracts, or summaries.

5VAC5-20-280. Discovery applicable only to 5VAC5-20-90 proceedings.

This rule applies only to a proceeding in which a defendant is subject to a monetary penalty or injunction, or revocation, cancellation, or curtailment of a license, certificate of authority, registration, or similar authority previously issued by the commission to the defendant:

1. Discovery of material in possession of the commission staff. Upon written motion of the defendant, the commission shall permit the defendant to inspect and, at the defendant's expense, copy or photograph: (i) any relevant written or recorded statements, the existence of which is known, after reasonable inquiry, by the commission staff counsel assigned to the matter to be within the custody, possession, or control of commission staff, made by (a) the defendant, or representatives, or agents of the defendant if the defendant is other than an individual, or (b) any witness whom the commission staff intends to call to testify at the hearing (exclusive of investigative notes), to a commission staff member or law enforcement officer; (ii) designated books, tangible objects, papers, documents, or copies or portions thereof, that are within the custody, possession, or control of commission staff and that commission staff intends to introduce into evidence at the hearing; and (iii) the list of the witnesses that commission staff intends to call to testify at the hearing. Upon good cause shown, the commission or hearing examiner may direct the commission staff to withhold disclosure of the identity of the persons described in clause (iii).

A motion by the defendant under this rule shall be filed and served at least 10 20 days before the hearing date. The motion shall include all relief sought. A subsequent motion may be made only upon a showing of cause as to why the motion would be in the interest of justice. An order or ruling granting relief under this rule shall specify the time, place, and manner of making discovery and inspection permitted, and may prescribe such terms and conditions as the commission may determine.

The commission staff may also obtain the list of witnesses that the defendant intends to call to testify at the hearing, and inspect, copy, and photograph, at commission staff's expense, the evidence that the defendant intends to introduce into evidence at the hearing.

The commission staff and the defendant shall be required to produce the information described above as directed by the commission or hearing examiner, but not later than 10 days prior to the scheduled hearing; and the admission of any additional evidence not provided in accordance herewith shall not be denied solely on the basis that it was not produced timely, provided the additional evidence was produced to commission staff or the defendant as soon as practicable prior to the hearing, or prior to the introduction of such evidence at the hearing. The requirement to produce the information described in this section shall be in addition to any requirement by commission staff or the defendant to timely respond to an interrogatory or document request made pursuant to 5VAC5-20-260.

Nothing in this rule shall require the disclosure of any information, the disclosure of which is prohibited by statute. The disclosure of the results of a commission staff investigation or work product of commission staff counsel shall not be required.

2. Depositions. After commencement of a proceeding to which this rule applies, the commission staff or a party may take the testimony of (i) a party, or (ii) a person not a party for good cause shown to the commission or hearing examiner, other than a member of the commission staff, by deposition on oral examination or by written questions. Depositions may be used for any purpose for which they may be used in the courts of record of the Commonwealth. Except where the commission or hearing examiner finds that an emergency exists, no deposition may be taken later than 10 days in advance of the formal hearing. The attendance of witnesses at depositions may be compelled by subpoena. Examination and cross-examination of the witness shall be as at hearing. Depositions may be taken in the City of Richmond or in the town, city, or county in which the deposed person resides, is employed, or does business. The parties and the commission staff, by agreement, may designate another place for the taking of the deposition. Reasonable notice of the intent to take a deposition must be given in writing to the commission staff counsel and to each party to the action, stating the time and place where the deposition is to be taken. A deposition may be taken before any person (the "officer") authorized to administer oaths by the laws of the jurisdiction in which the deposition is to be taken. The officer shall certify his authorization in writing, administer the oath to the deponent, record or cause to be recorded the testimony given, and note any objections raised. In lieu of participating in the oral examination, a party or the commission staff may deliver sealed written questions to the officer, who shall propound the questions to the witness. The officer may terminate the deposition if convinced that the examination is being conducted in bad faith or in an unreasonable manner. Costs of the deposition shall be borne by the party noticing the deposition, unless otherwise ordered by the commission.

3. Requests for admissions. The commission staff or a party to a proceeding may serve upon a party written requests for admission. Each matter on which an admission is requested shall be stated separately. A matter shall be deemed admitted unless within 21 days of the service of the request, or some other period the commission may designate, the party to whom the request is directed serves upon the requesting party a written answer addressing or objecting to the request. The response shall set forth in specific terms a denial of the matter set forth or an explanation as to the reasons the responding party cannot truthfully admit or deny the matter set forth. Requests for admission shall be filed with the Clerk of the Commission and simultaneously served on commission staff counsel and on all parties to the proceeding.

VA.R. Doc. No. R11-2429; Filed May 27, 2011, 9:25 p.m.