text:
    TERRY HAWTHORNE MARTEL, Plaintiff and Appellant, v. MONTANA POWER COMPANY, Defendant and Respondent.
    No. 85-251.
    Submitted on Briefs Jan. 19, 1988.
    Decided March 10, 1988.
    Rehearing Denied April 5, 1988.
    752 P.2d 140.

      R. Keith Strong argued, Church, Harris, Johnson & Williams, Great Falls, for plaintiff and appellant.
    Lon T. Holden argued, and Curtis G. Thompson argued, Great Falls, for defendant and respondent.
    Eric Thueson, Helena, for amicus curiae, Rowan Ogden.
   MR. JUSTICE HUNT

delivered the Opinion of the Court.

Plaintiff Martel appeals the jury’s special verdict-finding the defendant Montana Power Company (MPC) 25% negligent; himself 75% negligent; and setting his damages at $290,000. He also appeals the order denying his motion for a new trial.

We affirm in part, reverse in part and remand with instructions.

The following issues were raised on appeal:

1. Did the trial court err when it declined to instruct the jury that contributory negligence is not a defense to willful and wanton misconduct?

2. Did the trial court destroy the protection of the National Electrical Safety Code (NESC) when it:

a) gave only one instruction on the NESC and refused several others on specific NESC provisions?

b) instructed the jury that comparative negligence was a defense under these circumstances?

c) failed to instruct the jury that the NESC was only a minimum standard?

3. Did the trial court err when it refused to tell the jury the effect of comparative negligence on its verdict?

4. Did the trial court err when it allowed into evidence an interpretation of a construction standard which MPC did not have and had not used for design until the time of trial, and which had been received from its counsel just before trial?

5. Did the trial court err in allowing MPC to use the expert testimony of an employee involved with the suit months before trial, but identified only seven days before trial, when another expert had been identified as the power company’s primary expert and when appellant declined to make use of a continuance the trial court offered him?

6. Did the trial court err in granting MPC’s motion to dismiss appellant’s claim charging MPC with misrepresentation and bad faith under both the common law and the Unfair Trade Practices Act for its method of investigating and adjusting this accident?

On July 7, 1979, Terry Martel suffered permanent injuries as a result of being electrocuted when some portion of his body came within a few inches of an electric power transmission line carrying 100,000 volts. Martel testified that he had two beers with friends after they arrived at the old Piedmont Substation south of Whitehall, Montana. Martel was 19 at the time of the accident. The substation sits at the end of a short road off a county roadway.

After one other person climbed the tower, Martel also climbed it. A dispute in the facts exists as to whether martel reached out to the line but the evidence is clear he did not touch the line. In any event, his proximity to the line caused electricity from the line to arch to his body causing serious injury.

The substation has a tower which supports the transmission line. The tower is crossed with metal brackets and sits on top of a concrete footing sunk in the ground. To climb it one must take a step from the ground to the footing, then to a bracket 17” from the concrete footing, then to another bracket 2’%” above, then to a bolt step 4’ 6Vi” above that. Beyond that is a series of bolt steps leading to the top of the tower. No barricades surrounded the tower. A wooden sign was near the tower. The sign had been painted over but the word “danger” was still visible.

The Milwaukee Road built the substation prior to 1920 and MPC acquired it in 1974. MPC employees drove by the tower site at least once a month to examine the site. One employee and the Whitehall town marshal Rand McLester offered testimony that neither had ever seen children or any other unauthorized people on the tower.

Issue 1. Did the trial court err when it refused an instruction that contributory negligence is not a defense to willful or wanton misconduct?

Near the end of the plaintiff’s case-in-chief the trial court ruled that plaintiff established a prima facie case of willful or wanton misconduct on the part of defendant power company. Although the court instructed the jury that they could find that MPC had acted willfully or wantonly, the court refused plaintiff’s proposed instruction that comparative negligence was not an issue if they found the defendant had acted willfully or wantonly. The trial court correctly refused this instruction.

We said in Derenberger v. Lutey (Mont. 1983), [207 Mont. 1,] 674 P.2d 485, 487-88, 40 St.Rep. 902, 906, that comparative negligence is inapplicable when the action is based on willful and wanton misconduct. In that case, we made a distinction between conduct that is willful and wanton and conduct that is merely negligent. When the defendant’s conduct is willful and wanton, the plaintiff’s own mere negligence could not be used to offset his recovery. We now conclude that this distinction is faulty and expressly overrule Derenberger.

Prior to the enactment of comparative negligence, the rule preventing comparison of willful and wanton conduct and mere negligence served to ameliorate the harshness of the defense of contributory negligence which would bar all recovery to the plaintiff. Fortunately, we now operate under a scheme of comparative negligence where there is no danger of a plaintiff’s slight negligence barring all recovery against a willful and wanton or grossly negligent defendant. See Section 27-1-702, MCA as enacted in 1975 and amended in 1983. The rationale for the rule in Derenberger no longer exists.

It is more appropriate, then, as Justice Gulbrandson pointed out in his concurring and dissenting opinion in Derenberger, to adopt the interpretation from the state where our comparative negligence statute originated. The Wisconsin Supreme Court ruled that negligence in all its forms, gross, willful and wanton or ordinary, can be compared to and offset by each other under its comparative negligence statute. Bielski v. Schulze (1962), 16 Wis.2d 105, 114 N.W.2d 105, 111-114. In 1975, Montana adopted the Wisconsin statute. We hold, therefore, that all forms of conduct amounting to negligence in any form including but not limited to ordinary negligence, gross negligence, willful negligence, wanton misconduct, reckless conduct, and heedless conduct, are to be compared with any conduct that falls short of conduct intended to cause injury or damage. The trial court is affirmed on this issue.

Issue 2. Did the trial court destroy the protections of the NESC when it:

a) gave only one instruction on the NESC and refused several others on specific NESC provisions?

b) instructed the jury that comparative negligence was a defense under these circumstances?

c) failed to instruct the jury that the NESC was only a minimum standard?

Appellant Martel argues that failure to give the comparative negligence instruction as well as failure to give several other instructions regarding specific NESC provisions resulted in destroying the protections provided by the NESC. We agree with appellant’s position that plaintiff’s instructions No. 14 and 15 should have been given and, further, that the jury should have been instructed that the NESC was only a minimum standard. However, we agree with the trial court that the jury should have been instructed on comparative negligence as a defense under these circumstances.

2a.

Since 1917, the legislature has incorporated the NESC in one form or another into the Montana statutes and requires utilities in Montana to construct, install and maintain lines and equipment so as to reduce hazards to life as far as practicable. Section 69-4-201, MCA. A look at previous versions of Section 69-4-201 shows the legislature has also used the terms “future construction” since 1917. Since then the NESC has addressed the areas of electrical regulation involved in this case. Utilities, including MPC have understood it to be their duty to follow these standards. MPC witnesses testified they understood that a violation of these standards is contrary to Montana law.

Martel argues that NESC construction standards apply to this case and are controlling. MPC did not build the particular tower in question. However, its engineers testified that when MPC buys a facility, or when it contracts with someone else to build a facility for them, MPC has a duty to inspect to see that the facility complies with the NESC. Appellant’s argument is correct.

Appellant claims that plaintiff’s instructions No. 12, 13, 14 and 15 were wrongly denied and that the protections of the NESC were thereby destroyed. Instructions No. 12 and 13 were the 1973 NESC version and differed slightly from instructions No. 14 and 15, the 1977 NESC version.

Plaintiff’s proposed instructions No. 14 and 15 stated as follows:

“No. 14. The Montana Power Company must comply with the National Electrical Safety Code in its construction. Portions of the National Electrical Safety Code reads as follows:
“ ‘211. Installation and Maintenance

All electric supply and communication lines and equipment supply and communication lines and equipment shall be installed and maintained so as to reduce hazards to life as far as is practical.

“ ‘214. Inspection and Tests of Lines and Equipment
“ ‘A. When In Service.
“ T. Initial Compliance with Rules
“ ‘Lines and equipment shall comply with these safety rules when placed in service.
“ ‘2. Inspection
“ ‘Lines and equipment shall be inspected from time to time at such intervals as experience has shown to be necessary.
“ ‘3. Tests
“ ‘When considered necessary, lines and equipment shall be subjected to practical tests to determine required maintenance.
“ ‘4. Record of Defects
“ ‘Any defects affecting compliance with this code revealed by inspection or tests, if not promptly corrected, shall be recorded; such records shall be maintained until the defects are corrected.
“ ‘5. Remedying Defects
“ ‘Lines and equipment known to be defective so as to endanger life or property shall be promptly repaired, disconnected, or isolated.’
“If you find that the Montana Power Company did not install or maintain this tower in compliance with the sections of the National Electrical Safety Code quoted above, then you must find that the Montana Power Company was negligent.
“No. 15. The Montana Power Company must make its construction projects comply with the National Electrical Safety Code.
“A portion of the National Electrical Safety Code reads:
“ ‘280. Structures for Overhead Lines
“ ‘A. Supporting Structures
“ T. Protection of Structures
“ ‘b. Climbing.
“ ‘Readily climbable supporting structures such as closely latticed poles or towers, including those attached to bridges, carrying open supply conductors energized at more than 303 volts, which are adjacent to roads, regularly traveled, pedestrian thoroughfares, or places where persons frequently gather (such as schools or public playgrounds) shall be equipped with barriers to inhibit climbing by unqualified persons or posted with appropriate warning signs.
“ ‘2. Steps
“ ‘Steps permanently installed on supporting structures shall not be closer than 8 feet from the ground or other accessible surface.’
“If you find that the Montana Power Company’s construction did not meet the requirements of the National Electrical Safety Code set out above, then you must find that the Montana Power Company was negligent as a matter of law.”

MPC’s engineers testified that these provisions were designed to protect anyone around the towers regardless of age or authorization.

MPC contends that proposed instructions No. 12 and 14 were correctly refused because they state that “[T]he MPC must comply with the National Electrical Safety Code in its construction” and such statements are not applicable since MPC did not construct the tower. Also, respondent disputes these instructions claiming the jury may find respondent negligent if it violated certain NESC sections whereas the instruction stated it must so find.

The manner in which the footing, braces and channel irons were configured to provide access to the bolt ladder that led to the top of the tower is a matter of construction and design standards, as is the matter of installing barriers around towers or signs. The standards of the NESC should not be limited to a narrow meaning of the word “construction” but should imply an obligation to comply with the standards in the broader sense of “design” as well. Although MPC did not initially construct the tower it must still bring its “design” within the NESC standards. This duty may also include elements of maintenance.

We held in Barmeyer v. Montana Power Co. (Mont. 1983), 202 Mont. 185, 657 P.2d 594, 40 St.Rep. 23, that through Section 69-4-201, MCA, the legislature incorporated only the NESC construction standards. Therefore violations of nonconstruction NESC standards were merely evidence of negligence and not negligence as a matter of law. 657 P.2d at 602-03. Upon reflection, this seems an overly narrow interpretation of the statute. One of the purposes of the NESC is to ensure the safeness of electrical systems that have life-threatening capabilities. If a utility can avoid complying with these standards by purchasing constructed lines and towers instead of constructing them itself, the NESC becomes ineffectual. It is unlikely that the legislature intended such a result when it incorporated the NESC into Section 69-4-201, MCA. We have recognized that a violation of statutes intended to protect the public is negligence per se. Stepanek v. Kober Const. (Mont.1981), [_ Mont __,] 625 P.2d 51, 55, 38 St.Rep. 385, 391. We therefore overrule Barmeyer and hold that violations of maintenance and design standards intended to protect the public are also negligence per se. However, to be complete the trial court should inform the jury that in this action a violation of law is of no consequence unless it contributed as a proximate cause to an injury found by the jury to have been suffered by the plaintiff.

We hold that plaintiff’s instructions No. 14 and 15 properly may be given upon retrial after a modification to show that MPC must comply with the construction, maintenance and design standards of the NESC. We further hold that plaintiff’s proposed instructions No. 12 and 13 were correctly refused since they quoted the 1973 version of the NESC and therefore were not applicable law at the time of the accident in 1979.

2b.

Issue 2b is whether the protections of the NESC were destroyed when the trial court allowed the jury to consider the comparative negligence of the plaintiff even after a prima facie case of willful and wanton conduct on the part of the defendant had been demonstrated by the plaintiff. This issue is resolved by the holding in issue 1 and need not be addressed further.

2c.

Finally appellant contends that denial of plaintiff’s instruction No. 16 further destroyed NESC protections. The instruction reads:

“The National Electrical Safety Code is a minimum standard only. You may find that the Montana Power Company was negligent as defined in these instructions even if you find that the Montana Power Company fully complied with all the provisions of the National Electrical Safety Code in evidence in this case.”

In keeping with our holding that a violation of these NESC standards is negligence per se we further note that bare compliance with a statute such as Section 69-4-201, MCA, does not necessarily establish due care. If the circumstances are such that a danger exists beyond the minimum which this statute was designed to meet, then the jury may be informed that a defendant is negligent for not doing more. For this reason plaintiff’s proposed instruction No. 16 should not have been refused by the court.

Issue 3. Was it error for the trial court to refuse to tell the jury the effect of comparative negligence on the verdict?

We hold that it was error. The applicable statute, Section 27-1-702, MCA (1978), provides that a plaintiff may recover damages for injury if the plaintiff’s “negligence was not greater than the negligence of the person against whom recovery is sought, but any damages allowed shall be diminished in the proportion to the amount of negligence attributable to the person recovering.” The purpose of this statute is to remove the harsh treatment of contributory negligence on the part of plaintiff under the old scheme that prevented any recovery for any negligence of the plaintiff.

MPC argues that the scale may have gone too far the other way, and juries informed of the legal effect of comparative negligence are overly generous to the negligent plaintiff. It argues that the jury’s determination of damages will reflect the jury’s sympathies for the plaintiff’s injuries rather than reflect its computation of actual damages sustained and offset by the plaintiff’s own negligence.

In opposition, Martel argues that juries, not informed of the legal effect of their apportionment of negligence, operate in the dark. This, he argues, makes it impossible to tell whether the amount of damages awarded is based on the jury’s determination of actual damages or whether it is infected with speculation about the effect of its apportionment of negligence.

We have held that the jury can objectively consider the facts before it. Owens v. Parker Drilling Co. (Mont. 1984), 207 Mont. 446, 676 P.2d 162, 166, 41 St.Rep. 66, 71. In fact, we have refused to order a new trial based upon the reasons defendant gives. In North v. Bunday (Mont. 1987), [206 Mont. 247,] 735 P.2d 270, 277, 44 St.Rep. 627, 636, we expressly recognized the integrity of the jury in determining negligence percentages when we stated:

“We cannot impugn the integrity of the jury that it indulged in that kind of manipulation. The single duty of the jury in this case was to determine the applicable percentages of negligence, if such negligence existed. We cannot order a new trial in this case upon the mere speculation that if the jury could foresee the precise effect of their factual determination, even though not called on to determine damages, their factual determination would be different from what they decided.”

We are persuaded by appellant’s argument that the jury speculated about the effect of its percentage determinations. During deliberations the jury sent a note to the judge, “Do the percentages in question #4 apply to monetary compensation in question #5?” The judge answered, “Dear Folks: You must answer each question separately by 8 or more of your number.”

We think Montana juries can and should be trusted with the information about the consequences of their verdict. Other jurisdictions have considered this question and have come to differing conclusions. An excellent review of the holdings in those jurisdictions is set forth in the Idaho case of Seppi v. Betty (1978), 991 Idaho 186, 579 P.2d 683. After a lengthy discussion, the Idaho Supreme Court concluded that it is naive to believe that jurors do not speculate about the effect of their answers. To end speculation, the Idaho court said juries should be informed of the effect of their answers. Seppi, 579 P.2d at 691. The Idaho court tempered its position by giving the trial court the discretion not to inform the jury in those cases where the issues are so complex or uncertain that the jury would only be confused. Seppi, 579 P.2d at 692.

We adopt the reasoning of the Idaho Supreme Court and hold that under the circumstances of this case the jury should have been informed of the effect of its verdict. Upon the request of a party, the court must give this instruction unless it finds the issue so complex as to confuse the jury.

Issue 4. Did the trial court err when it allowed into evidence an interpretation of a construction standard which MPC did not have and had not used for design until the time of trial and had received from its counsel just before trial?

Since we are remanding the case we will discuss this issue only for purposes of guidance upon remand. Much of the trial focused on whether the tower was “readily climbable,” or “closely latticed” as those terms appeared in the 1973 and 1977 NESC, Section 280. The trial court allowed into evidence a copy of a 1984 interpretation of those terms written by the Institute of Electrics and Electronic Engineers in response to a request by an entity having difficulty applying those terms to a tower built in 1911. The interpretation was, as yet, unpublished and undistributed and MPC’s counsel seemed to be the only one in possession of the interpretation.

Appellant claims that this exhibit was totally irrelevant under Rule 401, M.R.Evid. and if admitted, any probative value would be outweighed by the danger of unfair prejudice and confuse and mislead the jury under Rule 403, M.R.Evid.

We hold it was error to admit the 1984 Section 280 interpretation into evidence as a construction standard which MPC did not have and had not used for design until the time of trial, and which had been received from its counsel just before trial. At a new trial, the interpretation can be admitted upon the laying of a proper foundation.

Issue 5. Did the trial court err in allowing MPC to use the expert testimony of its employee Pat Rice who was involved with the suit months before trial but was identified only seven days before trial, when another expert had been identified as the power company’s primary expert and when appellant had declined to make use of a continuance the trial court had offered him?

This issue is moot and need not be discussed further.

Issue 6. Did the trial court err in granting MPC’s motion to dismiss Martel’s claim charging MPC with misrepresentation and bad faith under both the common law and the Unfair Trade Practices Act?

The trial court dismissed Count II of appellant’s second amended complaint for failure to state a claim. Count II alleges that MPC, through its insurance adjuster, was liable for negligent and fraudulent misrepresentation; breach of defendant’s common law duty to act in good faith and fair dealing with appellant; and violation of the Unfair Trade Practices Act because, as a company self-insured up to $500,000 of its losses, its adjuster’s actions were tortious, malicious, oppressive and unjustified.

Appellant claims that the adjuster presented himself as an investigator for the Public Service Commission (PSC) and that he was a state official on official business. He claims most of the information gained was not transmitted to the PSC but rather retained in MPC’s files. Furthermore, the adjuster questioned appellant’s parents at the site of the accident and his friends and relatives as they sat outside the emergency room. Appellant contends this amounts to a tort in and of itself.

In addition, appellant argues that the trial court erred first by not assuming the facts alleged in the complaint to be true for purposes of a motion to dismiss. Rule 12(b)(6), M.R.Civ.P. Secondly, the court essentially rendered summary judgment for the defendant by assuming certain facts would be proved. Appellant contends that this, along with not informing the parties that the court is treating the motion as one for summary judgment, is error under Gebhardt v. D. A. Davidson & Co. (1983), 203 Mont. 384, 389, 661 P.2d 855, 857.

Appellant further contends the substantive law is also in his favor. He alleges the adjuster’s activities were performed in accordance with deliberate corporate policy and performed by a skilled, experienced and trained agent and appellant was harmed by these actions. The situation is also aggravated because the same agent working for MPC allegedly investigates and adjusts for MPC’s excess insurance carrier.

The latter portion of Count II alleged MPC was liable under Section 33-18-201, MCA, because that section of the Unfair Trade Practices Act provides a right of action to injured third persons. Klaudt v. Flink (1983), 202 Mont. 247, 252, 658 P.2d 1065, 1067. In opposition, respondent argues MPC was under a legal obligation to investigate the accident and report to the PSC. Section 69-3-107(2), MCA. MPC claims Count II did not allege the adjuster misrepresented his employment nor did it contain allegation of any duty owed by MPC which was breached and consists of unsupported conclusory statements. They argue dismissal was correctly based on the failure to state a claim.

This Court recently held in Ogden v. Montana Power Co. (Mont. 1987), [229 Mont. 387,] 747 P.2d 201, 44 St.Rep. 2068, that a self-insured electric utility which is primarily in the business of providing power to customers was not, at the time of Martel’s accident, regulated by the Unfair Trade Practices Act, Section 33-18-101, et seq. MCA (1985). The Act only covered those in the business of insurance. Therefore, the appellant can state no claim against MPC based on this act. Nor may appellant state a claim based on a common law duty to investigate claims and to attempt in good faith to make prompt and fair settlements where liability is reasonably clear. Ogden, 747 P.2d at 205. The trial court correctly dismissed Count II of appellant’s second amended complaint.

We affirm in part, reverse in part and remand.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, WEBER, GULBRANDSON, SHEEHY and McDONOUGH concur.


source: Caselaw Access Project

author: MR. JUSTICE McDONOUGH

license: Public Domain

text:
    In the Matter of the ESTATES OF ALBERT McDANIEL, John E. Wilson, Susie Dutt, Ethel Hunter, Clara Noonan, Gordon Wilson, Charles Little, John P. Cooney, Charles T. Hamilton, Minnie Brandriff, Robert Carlisle.
    No. 87-260.
    Submitted on Briefs Jan. 14, 1988.
    Decided March 10, 1988.
    750 P.2d 1103.
    Nick Rotering, Dept, of Institutions, Helena, for appellant.
    William Brolin, Anaconda, for respondent.
   MR. JUSTICE McDONOUGH

delivered the Opinion of the Court.

This is an appeal from the Third Judicial District of the State of Montana, County of Deer Lodge. The Department of Institutions appeals the District Court’s disapproval of its objection to the public administrator’s denial of their creditor’s claims. We affirm.

The issue on appeal is whether the District Court erred in allowing the Public Administrator, acting as the personal representative in these estates, to deny the Department of Institution’s creditor’s claim for services rendered the decedents at Montana State Hospital.

This case involves eleven separate probate causes. The decedents were all patients at Warm Springs State Hospital and were receiving Social Security or other retirement or disability benefits. The Department of Institutions was acting both as payee of these benefits and assessing care and maintenance charges. In 1976 Montana Legal Services brought suit against the Department in Caddell and Underwood, et al. v. Robert Mattson, et al., Cause No. 40258, Lewis and Clark County, saying there was a conflict in the Department’s dual role. The district judge issued an injunction pendente lite restraining the State Hospital from acting both as the representative payee and removing from the plaintiff patients’ accounts at the State Hospital any amounts allegedly due for care and maintenance. The social security benefits then accumulated in a trust pending resolution of conflict.

In 1985 the Department of Institutions notified the Public Administrator of the estates of decedents which required the creation of a probate estate. The Public Administrator filed in probate for all the decedents who had assets in the trust. The public administrator published notices to creditors in all these estates over three years subsequent to the respective decedent’s date of death. The Department filed its creditor’s claims for services rendered and the Public Administrator denied the claims on the basis of untimely filing. The Department objected to the denial and asked the District Court to set aside the denial and order the claims paid. The District Court disapproved the Department’s objections and ordered that the estates be distributed according to the laws of intestacy.

Section 72-3-803, MCA, sets forth the time frame for the filing of a claim against a decedent’s estate:

“(1) With the exception of claims for taxes and claims founded on tort, all claims against a decedent’s estate which arose before the death of the decedent, including claims of the state and any subdivision thereof, whether due or to become due, absolute or contingent, liquidated or unliquidated, founded on contract or other legal basis, if not barred earlier by other statute of limitations, are barred against the estate, the personal representative, and the heirs and devisees of the decedent unless presented as follows:
“(a) within 4 months after the date of the first publication of notice to creditors if notice is given in compliance with 72-3-801, provided claims barred by the nonclaim statute at the decedent’s domicile before the first publication for claims in this state are also barred in this state; or
“(b) within 3 years after the decedent’s death if notice to creditors has not been published.”

The Department contends that the statute of limitation argument is not available to the personal representative. The Department argues that the pending Underwood and Caddell lawsuit and the injunction tied up the patient’s funds and tolled the statute of limitations.

The Department relies on Reese v. Reese (1981), 196 Mont. 100, 637 P.2d 1183, as authority for their argument that a pending lawsuit tolls the Section 72-3-803, MCA, statute of limitations. Reese held “a claimant is not required to present a claim to the personal representative of a decedent’s estate where such claim is the subject of a legal proceeding against the decedent pending at the time of his death.” Reese, 637 P.2d at 1185. This Court in Reese upheld Section 72-3-804(2), MCA, which provides:

“(2) The claimant may commence a proceeding against the personal representative, in any court where the personal representative may be subjected to jurisdiction, to obtain payment of his claim against the estate, but the commencement of the proceeding must occur within the time limited for presenting the claim. No presentation of claim is required in regard to matters claimed in proceedings against the decedent which were pending at the time of his death.” Neither Reese nor Section 72-3-804(2), MCA, is applicable in this case. The Department’s creditor’s claims were not “the subject of a legal proceeding against the decedent.” The pending Caddell litigation was about the propriety of the State acting as both the representative payee and as the assessor of care and maintenance charges for a class of patients. The injunction pendente lite prevented the State from removing the patients’ funds but did not prevent the State from filing creditor’s claims during the pendency of the suit. When any one of the conditions in Section 72-3-803, MCA, has been met, as the three year bar was met here, the statute has run and the claim is barred. The three year statute of limitation set by Section 72-3-803(l)(b), MCA, was not tolled and the District Court was correct to disapprove the Department’s objection to the denial of its creditor’s claims.

The Department also asserts that the District Court was incorrect in view of the federal regulation, 20 C.F.R. 404.2010, that indicates that proceeds of benefits are to be used to pay care and maintenance charges of patients in institutions. However 20 C.F.R. 404.2010 merely provides for the appointment of a Representative Payee. The Department failed to comply with the law requiring the timely filing of creditor’s claims and thus its claims are barred. Affirmed.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES WEBER, SHEEHY and GULBRANDSON concur.


text:
    JOHN E. NITSCHKE and Susan M. Nitschke, husband and wife, Plaintiffs and Appellants, v. BLUE CROSS OF MONTANA, Defendant and Respondent.
    No. 86-517.
    Submitted Nov. 3, 1987.
    Decided March 11, 1988.
    751 P.2d 175.

      Herndon, Harper & Munro, James G. Edmiston argued, Billings, for plaintiffs and appellants.
    Church, Harris, Johnson & Williams, Don A. LaBar argued, Great Falls, for defendant and respondent.
    Dwight G. Rabuse argued, Officer of Personnel Management, Dept, of Justice, Washington, D.C., for amicus curiae.
   MR. JUSTICE McDONOUGH

delivered the Opinion of the Court.

Jack Nitschke was a federal employee insured by Blue Cross under the Federal Employees Health Benefits Act (FEHBA). The Nitschkes sued Blue Cross based upon a denial of benefits. The District Court of the Thirteenth Judicial District, in and for the County of Yellowstone, granted defendant’s motion to strike Counts II and IV of plaintiffs’ complaint. The motion to strike was denied for Counts I and III for breach of contract and breach of the implied covenant of good faith and fair dealing. The defendant then moved to dismiss the remaining Counts I and III for lack of jurisdiction on the basis that they stated a cause of action based on state law which is preempted by federal law. The District Court treated the motion to dismiss as a motion for summary judgment. The court denied the motion for lack of subject matter jurisdiction and granted the motion for summary judgment to defendant as to Counts I and III on the grounds that those claims were preempted by federal law. The plaintiffs appeal the District Court’s order granting the defendant summary judgment.

The issues raised on appeal are whether the District Court erred in:

I. determining that there were no issues of contested material fact and thus plaintiff’s claim for breach of contract fails as a matter of law;

II. holding that plaintiffs’ claim for breach of the implied covenant of good faith and fair dealing was preempted by federal law.

We affirm issue two and reverse issue one.

The plaintiff, John E. “Jack” Nitschke, is the Postmaster of the Miles City Post Office. As a federal employee he may select a health benefits program from either Blue Cross or Aetna Insurance Company. For 1981 Nitschke selected Blue Cross, and purchased dependent coverage for his wife, Susan M. Nitschke. The insurance program, a government wide plan sponsored by the Blue Cross and Blue Shield Federal Employee Program, was administered on a local basis by the defendant Blue Cross of Montana.

In August 1981, Jack Nitschke became aware that his wife had an alcohol dependency problem. He was aware that his insurance benefit plan provided benefits for alcoholism treatment. The brochure stated:

“Alcoholism Treatment Benefit
“The Plan pays in full for alcoholism treatment in a freestanding alcoholism facility approved by the local plan.
“Basic Hospital Benefits are also paid in full in a member hospital and at 80 percent in a nonmember hospital.
“Benefits are available for up to 28 days per alcoholism treatment session with a maximum of two 28-day sessions in a person’s lifetime (including sessions covered by Supplemental Benefits). Additional days and the remaining 20 percent are not covered by Supplemental Benefits.”

At the recommendation of a friend, he took his wife to the Rimrock Foundation in Billings, Montana. The Rimrock Foundation was located in Merrilac Hall, a wing of St. Vincent’s Hospital. The foundation was operating under an affiliation agreement with St. Vincent’s Hospital which provided for St. Vincent’s to admit and provide medical care for patients at the Rimrock Foundation. Susan Nitschke completed the 28 day alcoholism treatment session.

Midway through the program Jack Nitschke was informed by Rim-rock personnel that Blue Cross was inconsistent about providing benefits to cover Rimrock programs. Rimrock contacted Blue Cross and was told “Blue Cross employees are not to discuss benefits as they relate to the Rimrock Foundation.” Jack Nitschke did not try to transfer his wife to another facility because he believed Blue Cross would provide benefits and because of the demands of his job.

Nitschke paid $3,600 for his wife’s treatment and submitted the claim to Blue Cross for reimbursement. Blue Cross denied the claim because Rimrock Foundation was neither a hospital nor a facility “approved by the local plan.” When asked to produce a copy of the “local plan” relied upon, Blue Cross first stated that it was the 1981 Service Benefit Plan, then they said “local plan” refers to the entity Blue Cross of Montana, thus Blue Cross sets the approval criteria. Blue Cross stated the approval criteria included licensing of the facility by the Department of Health and Environmental Sciences. Rimrock was not so licensed. Blue Cross had in the past approved alcoholism treatment benefits for employees of the State of Montana who were treated at the Rimrock Foundation.

ISSUE I

The standard for reviewing a grant or denial of summary judgment was set forth in Reagan v. Union Oil Company of California (Mont. 1984), [208 Mont. 1,] 675 P.2d 953, 956, 41 St.Rep. 131, 134. “The standard that an appellate court applies in reviewing a grant or denial of a motion for summary judgment is the same as that utilized by the trial court initially under Rule 56, M.R.Civ.P. — a summary judgment is proper when it appears ‘that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.’ ” This Court must review the evidence in a light most favorable to the party opposing summary judgment. Downs v. Smyk (Mont. 1982), 200 Mont. 334, 651 P.2d 1238, 39 St.Rep. 1786.

Blue Cross claims there are no genuine issues of material fact, that the Rimrock Foundation is not a hospital and that the benefits approved at Rimrock for a state employee were under a different contract and have no bearing on what benefits are payable under the Nitschkes’ contract. Blue Cross further claims the “local plan” is not the Nitschkes’ plan, the 1981 Service Benefit Plan. According to Blue Cross the “local plan” is the entity Blue Cross itself. So, “approved by the local plan” means approved by Blue Cross of Montana. By drawing reasonable inferences in favor of Nitschkes, there appears a genuine material issue of fact concerning whether Rim-rock was “approved by the local plan”, Blue Cross itself. There is a question of fact concerning whether the benefits sought are consistent with the provisions of the contract and thus would not be preempted by federal law. 5 U.S.C. Section 8902(m)(l). The granting of summary judgment on the basis presented to us was in error and we reverse on this issue.

ISSUE II

The Ninth Circuit Court of Appeals case, Hayes v. Prudential Insurance Co. of America (9th Cir. 1987), 819 F.2d 921, is dis-positive of this issue. In Hayes, the appellants’ state law claims were: 1) breach of contract, 2) breach of the implied covenant of good faith and fair dealing, and 3) violations of the California Insurance Code. The Ninth Circuit specifically held “Tort claims arising out of the manner in which a benefit claim is handled are not separable from the terms of the contract . . . Moreover, the claims ‘relate to’ the plan under Section 8902(m)(l) as long as they have a connection with or refer to the plan .... All appellants’ state law claims refer to the plan, and therefore fall under the premption clause.” Hayes, 819 F.2d at 926. These claims are governed by federal law and not state law. Federal law does not provide a cause of action for breach of the covenant of good faith and fair dealing in tort. We affirm Issue II.

We remand for further proceedings in accordance with this opinion.

MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, WEBER, GULBRANDSON, SHEEHY and HUNT concur.


author: MR. CHIEF JUSTICE TURNAGE MR. JUSTICE WEBER,

text:
    MONTANA-DAKOTA UTILITIES CO., a Delaware Corporation, Plaintiff, Petitioner and Appellant, v. MONTANA DEPARTMENT OF PUBLIC SERVICE REGULATION, Montana Public Service Commission, and Montana Consumer Counsel, Defendants, Respondents and Respondents.
    No. 87-60.
    Submitted Dec. 4, 1987.
    Decided March 11, 1988.
    752 P.2d 155.

      Hughes Kellner, Sullivan & Alke; John Alke & George Dalthorp argued, Helena, Steven G. Gerhart, Montana-Dakota Utilities, Bismarck, N.D., for plaintiff, petitioner and appellant.
    Geralyn Driscoll argued, Public Service Commission, Mary Wright argued, Montana Consumer Counsel, Helena, for defendants, respondents and respondents.
   MR. CHIEF JUSTICE TURNAGE

delivered the Opinion of the Court.

Plaintiff Montana-Dakota Utilities Company (MDU) appeals a December 7, 1986, judgment of the First Judicial District Court, Lewis and Clark County. The District Court upheld the decision of the Montana Public Service Commission (PSC), which reduced the coal expenses used by MDU in setting rates for Montana electric service. We affirm.

MDU raises three issues for our review:

1. Did the PSC err in adopting the “rate of return” method to determine the amount of MDU’s coal expense which could be passed through to Montana ratepayers?

2. Did the PSC err in applying the “rate of return” method to MDU’s coal expense?

3. Does the record support the PSC decision?

In September of 1983, MDU filed a request with the PSC for a $8,731,439 rate increase, using 1982 as the “test year.” As part of its supporting evidence, MDU reported a $15,622,000 expense for lignite coal used by MDU to generate electricity for Montana consumers. The coal expense was paid by MDU to Knife River Coal Mining Company (KRC). KRC is a wholly-owned subsidiary of MDU Resources Group, Inc., of which MDU is a division. The coal expense represented 100 percent of MDU’s coal purchases for 1982. MDU’s purchases represented 25 percent of KRC’s total coal sales for 1982.

Montana Consumer Counsel (MCC), the agency established to represent ratepayers’ interests, contended that MDU’s coal expense should be reduced by $585,000. MCC’s expert witness, Dr. John Wilson, compared KRC to six natural resource companies which sold both coal and oil. Dr. Wilson testified that the six companies’ 1982 average rate of return on equity was 15 percent, while KRC’s rate of return on equity was 22 percent.

After hearing the arguments, the PSC disallowed $347,000 of MDU’s claimed coal expense. The PSC determined that KRC’s return rate of 22 percent was too high and “evaded the spirit of regulation.” However, the PSC found weaknesses in both MCC and MDU’s methods for calculating MDU’s coal expense. PSC determined MDU’s annual coal expense for ratemaking purposes by applying a hybrid rate of return of 14.565 percent to KRC on owner’s equity. To arrive at this percentage, the PSC calculated the rate of return for the six companies suggested by Dr. Wilson and one comparable company, Baukol-Noonan, Inc., suggested by MDU. The PSC then adjusted the rate of return to “normalize” KRC’s 1982 test year and also factored in KRC’s tax rate. The PSC calculated the rate of return on KRC’s total year-end equity, but limited its final adjustment to the 25 percent of KRC’s total sales to MDU. Thus, the PSC avoided regulating the price of coal charged by the subsidiary KRC, and yet fixed a fair price for coal expense to be incurred by MDU when considered for ratemaking purposes.

The PSC justified its calculation procedure in Finding 165:

“The classification of coal reserve operations as a nonutility or utility function becomes important to electric ratepayers due to the different ratemaking treatments afforded to the coal fuel expense. It is not clear to the Commission why coal reserves of Knife River Coal Company should be considered a nonutility function with its ratemaking treatment based on comparable profits and prices. Public utilities are required to provide service at the lowest reasonable rate, and the Commission is required to allow rates that reflect the lowest reasonable costs.”

Upon judicial review, the District Court found that the record supported the positions of both parties. However, the court concluded that the PSC “rate of return” analysis method was not an abuse of discretion and affirmed the PSC. The District Court noted that recent Montana Supreme Court decisions emphasize “the reasonableness of the price for coal paid by the parent to the subsidiary and not on the propriety of ratebasing the subsidiary.” (Emphasis added.) MDU appeals.

Issue 1. Adoption of “rate of return” method.

MDU contends that PSC’s rate of return method is flawed because four of the six companies were not truly comparable to KRC. MDU argues that these companies deep-mined bituminous coal in the East, where the high overhead costs squeezed profit margins. MDU asserts that Baukol-Noonan, which earned a higher return than KRC, was the only company truly comparable to KRC.

On review of this issue, we note that the PSC is vested by statute with the duty to supervise and regulate the operations of public utilities and to see that their rates are “just and reasonable.” Section 69-3-330, MCA.

In determining what is just and reasonable, the PSC is not restricted to any single formula, if the method followed and the order entered “when applied to the facts and viewed as a whole do not produce an unjust or arbitrary result.” Montana-Dakota Utilities Co. v. Bollinger (Mont. 1981), [_ Mont. _,] 632 P.2d 1086, 1091, 38 St.Rep. 1221, 1227 (where the PSC reduced MDU’s coal expenses from KRC using Dr. Wilson’s rate of return method, but this Court remanded the case to the PSC to determine if a factual basis existed for the rate of return method).

The PSC has the power to adopt any non-arbitrary method it chooses. Bollinger, 632 P.2d at 1091. In the instant case, the PSC adopted Dr. Wilson’s method to compare KRC’s rate of return to the coal industry generally. Perfect comparisons are impossible because coal is not a fungible commodity. Coal has many variables such as density, latent BTU’s, sulphur content, debris, extraction costs, and transportation costs. At the delivery site, the coal consumer’s boilers must be custom-matched to the coal producer’s particular fuel. The comparable which could precisely correlate with the MDU-KRC rate of return does not exist. The PSC used similar comparables, then extrapolated the variables. In doing so, the PSC was simply trying to determine whether the coal expense paid by MDU was reasonable.

The PSC decision conforms to our past holdings on this issue. The PSC adopted a method which was far from perfect, but it was also far from arbitrary. In the balance, we find it was reasonable. We hold that the method was valid on its face and now move to the validity of its application.

Issue 2. Application of the method.

MDU contends that the PSC exceeded its jurisdiction when it applied the rate of return method to KRC’s sales, thereby improperly treating KRC as part of MDU. MDU asserts that the PSC must limit its scrutiny to KRC’s sales to MDU and may not examine the other 75 percent of KRC sales. MDU further asserts that KRC’s most profitable sales were not to MDU, and therefore these other sales distorted the profit margins on sales to MDU.

In reviewing this issue, we note that the “interest of the PSC is to see that MDU does not reap an unfair profit on its investment in its subsidiary by allowing the subsidiary to overcharge the parent for coal when the coal expense will be passed on to the ratepayers.” Bollinger, 632 P.2d at 1089.

Contrary to MDU’s assertions, MDU’s coal purchases are at issue, not KRC’s coal sales. The key factor in the PSC’s examination was the extent to which KRC functioned as an organ of MDU. As the PSC noted: “The vertical integration by MDU into the coal mining business may provide the Company with an opportunity to circumvent effective return regulation by capturing monopoly profits in its affiliated upstream coal operations.” Throughout the proceedings, PSC maintained its regulatory focus on MDU, not KRC.

In determining a reasonable rate of return, the PSC made several economic corrections in MDU’s favor. The final PSC decision came close to splitting the difference between the $585,000 adjustment advocated by MCC and the zero dollar adjustment advocated by MDU. The final $347,000 adjustment amounted to approximately a 2 percent reduction in MDU’s allowable coal expense. The final adjustment had no effect on KRC, but only on MDU.

As applied, the PSC method scrutinized the captive coal transaction to ensure a reasonable rate. “When one of the expenses submitted by MDU is caused by transactions with a subsidiary company, the scrutiny applied by the PSC must be all the more intense.” Bollinger, 632 P.2d at 1089. We hold that the PSC’s “rate of return on equity” method was properly composed and applied.

Issue 3. Support in the record.

MDU contends that the PSC’s decision is not supported in view of the whole record. MDU argues that its evidence was more probative. MDU asserts that the price KRC charged MDU for its coal was competitive and that MDU could not acquire cheaper coal from any other source. Furthermore, MDU asserts that the contracts to sell coal to MDU were negotiated in an arm’s length transaction by a third-party independent utility. MDU concludes that the PSC actions reflected a predetermined decision that PSC was going to reduce MDU’s coal expense regardless of the evidence in the record.

In reviewing this issue, we note:

“. . . The Commission is the judge of the facts and the court only decides questions of law. [Citation omitted.] In deciding questions of law, this Court may determine whether the PSC acted arbitrarily and unreasonably without sufficient evidence to support its findings, or exercised its authority unreasonably, or set the utility rates so low that they are confiscatory and deprive the utility of its property without due process of law. [Citation omitted.] This Court on appeal cannot substitute its judgment for that of the PSC. [Citation omitted.]

Mountain States Telephone & Telegraph Company v. Department of Public Service Regulation, Montana Public Service Commission, et al. (Mont. 1981), [_ Mont __,] 624 P.2d 481, 485, 38 St.Rep. 165.

“Our inquiry is limited to determining whether substantial evidence was presented to support the PSC’s decision or if the decision was unjust or arbitrary.” The Montana Power Company v. Dept. of Public Service Regulation, Mont. Public Service Commission, et al. (1983), 204 Mont. 224, 229, 665 P.2d 1121, 1123 (where the PSC reduced MPC’s coal expenses from its wholly-owned subsidiary using Dr. Wilson’s rate of return method, and this Court affirmed on the basis that substantial evidence supported the PSC’s decision).

Essentially, MDU argues that the decision of the PSC is not sustainable because some of the evidence in the record supports MDU’s position. MDU has misstated the burden of proof. “If a party contends that the order of the PSC is unreasonable, it is creating a fact issue, and under Section 69-3-402(4), MCA, that party has the burden of proof before the reviewing court on the issue. If it is contending that the order or decision of the PSC is unlawful, the appealing party has the burden to show PSC abused its discretion.” Montana Dakota Co. v. Montana Department of Public Service Regulation, et al. (1986), [223 Mont. 191,] 725 P.2d 548, 553, 43 St. Rep. 1648, 1653-1654.

MDU has failed to show how the PSC decision was unreasonable or arbitrary. MDU presented no evidence which tracked its own coal expenses by market price. We note that MDU’s coal purchases from KRC were an affiliated transaction, where coal is bought and sold in a vertically-integrated market. MDU had no market incentive to pay KRC the lowest possible price. When MDU paid KRC, MDU was paying itself.

Similarly, MDU did not present any evidence of fair market prices from comparable coal companies. The market price method may actually be less quantifiable than the rate of return method because coal is a commodity with fluctuating prices. In either case, the selection of methods lies squarely within the discretion of the PSC:

“We did not hold [in Bollinger] that the PSC must use a ‘market price’ method if a competitive marketplace can be established; the choice of methods is left to the PSC. In the instant case, the PSC chose to apply a ‘rate of return’ method in an effort to determine the reasonableness of the price paid by MPC for Western Energy coal.”

MPC, 665 P.2d at 1123.

Alternatively, MDU argues that the rate of return on equity must be based in part on the fair market value of MDU coal assets and not the depreciated original cost of the coal. This argument is flawed due to the great difference between the current price of coal and the original price of the coal reserves. In exercising its authority to determine a rate of return for MDU, the PSC essentially concluded that MDU’s proposed return on assets method, valuing coal reserves at current market prices, would result in a rate of return in excess of what the PSC determined to be reasonable.

In conclusion, we hold that the PSC’s method of reducing MDU’s coal expense is supported by substantial, credible evidence. The PSC used both Dr. Wilson’s and MDU’s comparables. The PSC’s final calculation represented a compromise. In both Bollinger and MPC, the issue turned on the sufficiency of evidence, and not on the superiority of method. PSC’s summary of evidence tracks in its conclusion. “So long as the record supports the [PSC’s] decision, that judgment must stand.” MPC, 665 P.2d at 1124.

Affirmed.

MR. JUSTICES HARRISON, SHEEHY, McDONOUGH and HUNT and HON. C.B. McNEIL, District Judge, sitting for MR. JUSTICE GULBRANDSON, concur.

MR. JUSTICE WEBER,

dissenting:

While I substantially agree with the principles of law contained in the majority opinion, I dissent from the application of the principles to the facts of the present case. Rate cases are extremely difficult for our appellate review because of the complexity of the information presented, the extensive testimony, and also because the Public Service Commission (PSC) sets forth hundreds of findings of fact and many conclusions, making it difficult to analyze or distinguish. In the present case (MDU II), I contend that there is a superficial adherence to the opinions of this Court, but in actuality a fundamental disregard of the past holdings. Let us consider the two most recent cases involving similar issues.

Montana-Dakota Utilities Co. v. Bollinger (Mont. 1981), [_ Mont. _,] 632 P.2d 1086, 38 St.Rep. 1221, (MDU I) was decided in 1981. In MDU I we vacated the judgment of the district court and remanded the case to the PSC for additional hearings. MDU I involved the same utility company, the same Knife River Coal Company, and the same question of rate fixing with regard to coal sold by Knife River, MDU’s wholly owned subsidiary. We there chose not to accept the rate of return theory as presented by the Consumer Counsel through the expert Dr. Wilson. We stated as follows:

“In view of the necessity for a rehearing, the PSC should again consider if there is an independent, competitive market which establishes a going market price for coal, from which the PSC can determine if the price MDU pays Knife River for coal is reasonable. While it is true that the PSC found that absolute comparability between coal prices impossible to determine, it appears to this Court that the prices paid by a number of other companies to Knife River for two-thirds of its coal production is evidence of a competitive market for comparison to the Knife River price paid by MDU. In addition, there was evidence of prices charged by other companies in the competitive area. If the PSC finds that the present evidence is insufficient, it appears appropriate that the PSC require the parties to submit additional evidence . . .
“As a matter of justice, it appears to this Court that it might be better for the PSC to use a marketplace cost of coal approach, if it can obtain sufficient facts for its determination, rather than using the rate of return method with all of its difficult theories and computations. While the PSC does have the right to choose the method followed, this Court did not find a factual reason for the summary rejection of the marketplace cost of coal approach. (Emphasis supplied.]”

MDU I, 632 P.2d at 1091-92. We therefore reversed the PSC determination because there was no factual reason given for the summary rejection of the marketplace cost evidence submitted by MDU.

With MDU I in mind, let us consider the next case, Montana Power Co. v. Department of Pub. Serv. (1983), 204 Mont. 224, 665 P.2d 1121, herein referred to as MPC. The argument between the parties in MPC was similar to that in MDU I. The MPC presented extensive evidence by Arthur D. Little, Inc., a firm of national prominence in the field of coal supply contracts. That firm sought and received bids from nine companies and determined that the price of coal charged by the MPC subsidiary was the lowest price available to MPC’s Billings plant. In referring to MDU I, this Court concluded that we did not hold that the PSC must use a market price method if a competitive marketplace can be established, but that the choice of methods was left to the PSC. As a result the Court did not consider whether there was substantial evidence to support the market price method. Instead, it analyzed whether there was substantial evidence to support the rate of return method. The standard which it applied was whether the PSC acted arbitrarily and unreasonably without sufficient evidence to support its findings. The Court then pointed out that the MPC did not challenge or oppose the values submitted by the Consumer Counsel through Dr. Wilson, its expert. As a result it then concluded that the record was sufficient to support the decision made by the PSC and no challenge would be allowed on appeal. A vigorous dissent was prepared by Justice Harrison pointing out that there was an arbitrary and capricious decision made by the PSC. I wish to emphasize that in MPC, the rule applied was that no argument could be made by MPC, because it had failed to present evidence at the administrative level opposing the expert evidence submitted by the Consumer Counsel.

The present case is a continuation of the conflict between marketplace cost of coal approach as compared to rate of return approach. Here it is important to consider the nature of the evidence submitted by both MDU and the Montana Consumer Counsel. The uncontradicted evidence submitted by MDU established that there were not less than six major generating stations in the general area and that there were five different coal mines supplying coal to the stations. As a result those purchasing coal from Knife River had a number of other alternatives. Other witnesses testified that there is a very competitive market for the supplying of Northern Plains lignite coal in this area. In addition to Knife River there are four companies, each of which operate mines that have the capacity to produce in excess of one million tons per year of Northern Plains lignite, the same type of coal produced by Knife River. These were Consolidation Coal Company, now wholly owned by Dupont, North American Coal Company and its subsidiary, Falkirk Mining Company, and Baukol-Noonan, Inc. In addition North American was in the process of developing a new mine through another subsidiary. There were also several other operators producing smaller quantities basically for domestic markets. The total output of lignite coal from this area in one year was close to eighteen million tons. Detailed evidence was presented of the coal prices charged by these various operators. In addition, evidence was presented on the approximately seventy-five percent of Knife River’s coal which was sold on the marketplace to parties other than MDU. In substance, MDU presented more than sufficient evidence to prove the competitive market price for coal in the Knife River vicinity. In my view, the evidence was clearly sufficient to meet the standard outlined in MDU I.

In addition, I would emphasize that no contrary evidence was submitted by any party. At that point, if the rationale of MPC were applied, it would seem that the PSC could have been required to consider in detail and explain in detail its reasons for refusing to accept the uncontradicted evidence, and to determine the coal price on a market price theory. That seems particularly true in view of our holding in MDU I where we suggested as a matter of justice that it appeared that it might be better to use the marketplace cost of coal approach. MDU I, 632 P.2d at 1092. However, I recognize that that statement was weakened by MPC when we stated that the choice of methods was left to the PSC.

However, I suggest that while the choice of methods may be left to the PSC, it should not be allowed to make an arbitrary decision denying the use of the marketplace cost of coal. Instead of pointing out any shortcomings in the evidence submitted by MDU, the PSC quoted from a Department of Justice report, “Competition in the Coal Industry,” which stated that in practice, identification of the appropriate competitive prices is virtually impossible. That quote emphasizes that coal prices are not some broad national aggregate but are tied to very specific locations and quality factors. It further emphasizes that it may prove difficult to estimate an appropriate set of market prices to use. That is not a justification for refusing to consider the evidence submitted by MDU. That is a general statement which pertains to the comparison of coal prices on a broad or national scale. It does not appear determinative when we have specific price figures offered for the sale of coal of the same type and quality in the specific area, with the only differing factor being transportation costs. I conclude that as was true in MDU I, the Court cannot find a factual reason for the summary rejection of the marketplace cost approach and the judgment should therefore be vacated.

As a result of my foregoing analysis, I disagree strongly with the conclusions in the majority opinion that MDU presented no evi-. dence which tracked its own coal expense by market price and that MDU did not present evidence of fair market prices from comparable coal companies. In the present case, the evidence presented by MDU of the seventy-five percent of the coal sold by Knife River to other parties is substantial evidence of such coal expense as only twenty-five percent was sold to MDU itself. As pointed out in MDU I, it should appear to this Court that the prices paid by a number of other companies to Knife River for two-thirds (which has now become seventy-five percent) of its coal production is evidence of a competitive market for comparison of the Knife River price to MDU. I also disagree with the conclusion that MDU failed to present evidence of fair market prices from comparable coal companies as there is substantial evidence of that type which is unrebutted in the record.

I further disagree with the conclusion that there is substantial evidence to support the rate of return method as determined by the PSC. In contrast to MPC where the utility failed to present any rebutting testimony to that testimony of Dr. Wilson, in the present case, MDU presented substantial' evidence to show that there were a number of problems with the testimony of Dr. Wilson. The PSC pointed out in its own findings that the inclusion of eastern mining operations which mine bituminous coal and have characteristics significantly different from Knife River operations posed significant problems in determining if they are comparable coal companies. As a result the PSC concluded that it was reasonable to check such admittedly imperfect data by looking at other areas of the economy for profitability figures. The response of the PSC to the proof of the inadequacy of the Dr. Wilson evidence was to use as comparable companies, other companies which no one contended were comparable. These included Ashland Oil, Atlantic Richfield, Houston Natural Gas, Mobil, Kerr-McGee, and Occidental Petroleum, most of which were oil companies. The use of such companies which no one contended were comparable in itself appears to be arbitrary. Further, the excess profit calculation performed by Dr. Wilson considers the profitability of the entire Knife River Coal Company. The most profitable sales by that company were not the sales to MDU. As a result, there was an improper scaling back of the earnings of Knife River. As contended by MDU, the effect of this methodology is to capture a portion of the Knife River profits from sales to parties other than MDU and use them to subsidize the MDU electric customers.

The effect of the calculation of the rate of return method by the PSC is the indirect regulation of Knife River. Apparently that is the theory which the PSC set forth in Finding 165 which is quoted in the majority opinion.

In MDU I, the majority opinion discussed the California approach of rate determination (which Justice Sheehy earnestly advocated in his dissent) and in refusing to apply that approach stated as follows:

“Perhaps the, PSC, in setting the rate of return level, was relying upon the theory prevalent in the ‘California approach’ to the issue at hand. Under this approach, the subsidiary is treated not as an independent entity but as part of the utility for ratemaking purposes. The theory underlying this position was discussed in Washington Water Power v. Idaho Public Util. (1980) . . .
“We note, however, that the majority of those cases using this approach involve the Bell Telephone System and its manufacturing subsidiaries. These subsidiaries sell virtually all their manufactured products to the parent, Bell Telephone — a fact which is materially different from the present situation where the bulk of Knife River coal (a depletable natural resource) is sold to customers other than its parent .... Such an approach should not be deemed applicable in this instance.” (Emphasis supplied.)

MDU I, 632 P.2d at 1090-91. I frankly am not clear of the effect of the majority opinion on the “California approach.” From the statements made by the PSC, it seems clear that it intends to pursue such an approach in its rate determination. If the intention of the majority opinion is to overrule this determination in MDU I, because of its extreme significance on all similar cases, it should be discussed in detail and the rationale explained. I personally do not find any argument presented which persuades me that the “California approach” is a necessary part of the rate determination process for Montana. There of course has been no such determination by the legislature.

Under the factual analysis as above set forth, I conclude that it is not appropriate to affirm the PSC and the order of the District Court which in turn affirmed the PSC. I would remand this case for further proceedings.


author: MR. JUSTICE WEBER,

text:
    GARY S. MARBUT, Plaintiff/Relator, v. SECRETARY OF STATE, Jim Waltermire, Defendant/Respondent.
    No. 88-083.
    Submitted on Briefs March 10, 1988.
    Decided March 11, 1988.
    752 P.2d 148.

      Gary S. Marbut, pro se.
    Gregory L. Curtis, Legal Counsel, Secretary of State’s Office, Helena, Luxan & Murfitt, Walter S. Murfitt, Mike Greely, Atty. Gen., Joe Roberts, Asst. Atty. Gen., Helena, for defendant/respondent.
    James Goetz, Bozeman, for petitioners in intervention.
   OPINION AND ORDER OF DISMISSAL

On February 18, 1988, Gary S. Marbut, as relator filed in this Court his application to commence an original proceeding for declaratory judgment, writ of mandate, and other appropriate relief.

Before accepting jurisdiction, we issued an Order dated February 22,1988, directing the Relator to serve a copy of his application and proposed complaint upon the Attorney General, and requiring the Attorney General to file in this Court a response to Relator’s application and proposed complaint, including particularly whether the proposed complaint “presents a justiciable controversy for this Court to determine.”

In our order of February 22, 1988, we stated the problem presented by the Relator’s application and proposed complaint:

“On examination, the application and complaint appear to be in the nature of a ‘friendly suit.’ The application recites in paragraph 4 that the Secretary of State has advised local election officials that the ballot for the upcoming primary election to be held June 7, 1988 will include initiatives CI-27 and CI-30. In his proposed complaint and petition for declaratory judgment Mr. Marbut prays in paragraph 3 of the prayer that we issue an alternative writ of mandate requiring the Secretary of State to commence the administrative process for inclusion of CI-27 and CI-30 in the next regular statewide election. The proposed complaint seeks the same relief it is alleged the Secretary of State is about to grant.”

The Attorney General filed his written response in this Court on March 7, 1988. In it, he pointed out as basic the requirement that parties to the litigation be adverse, relying on Moore v. Charlotte-Mecklenburg Board of Education (1971), 402 U.S. 47, 47-48, 91 S.Ct. 1292, 1293, 28 L.Ed.2d 590, 591. He also pointed out that Montana cases support the requirement of adversarial parties in litigation, Chovanak v. Matthews (1948), 120 Mont. 520, 188 P.2d 582; Stewart v. Board of County Commissioners (1977), 175 Mont. 197, 573 P.2d 184. The Attorney General further stated that declaratory judgment actions still require justiciability, citing Chovanak, supra. The Attorney General concluded that justiciability is not an idle requirement, that the presence of adverse parties assures the Court that it will have the benefit of full debate on the issues, and that the requirement was of special importance for public issues of statewide impact, such as are raised by CI-27 and CI-30.

On March 7, 1988, the several parties known collectively as “Montanans for the Preservation of Citizens’ Rights” (see State of Montana ex rel. Montana Citizens for Preservation of Citizens’ Rights v. Waltermire (1987), [227 Mont. 85,] 738 P.2d 1255, 44 St.Rep. 929A) filed a petition to intervene here for the limited purpose of seeking dismissal of the action brought by Relator together with Intervenor’s proposed motion to dismiss, answer and response to the Relator’s complaint, and memorandum in support.

On March 8, 1988, the Relator, Mr. Marbut, filed his brief in response to the application to intervene. In his response, Mr. Marbut contends the proposed Intervenors have proceeded prematurely because the Court has not yet accepted jurisdiction; that Mr. Marbut would not move to join the Intervenors as an interested party in the action because he would not want to impose attorney fees on Intervenors; that if intervention were granted, no costs should be recoverable from Mr. Marbut in case of a decision adverse to him; and that in answer to the Intervenors, he cannot rely on the “good intentions” of Secretary of State Waltermire to place the initiatives on the ballot and therefore must have a writ of mandate from this Court directed to the Secretary of State.

Counsel for the Secretary of State (counsel has now been deputized by the Attorney General to appear for the Secretary of State) also filed a response on March 7, 1988. Counsel contends for the Secretary that there are genuine existing rights and interests involved, that a controversy exists upon which the Court may effectively operate, and that the judicial determination will have the effect of a final judgment of law; that a question of law exists as to whether the provisions of Section 13-35-107, MCA, offend the State Constitution, Article XIV, Section 9; and that the declaratory judgment sought by relator limits his request to guidance in this particular circumstance.

It is clear that no justiciable controversy is presented by the application for a writ of mandate. In paragraph 9 of the Secretary’s answer and response to Mr. Marbut’s petition, the Secretary states that by letter dated February 5, 1988, he advised the election officials in each county in the State of Montana that he intended to submit the constitutional initiatives, CI-27 and CI-30, to the qualified electors at the next regular statewide election to be held on June 7, 1988 for acceptance or rejection. The response of the Attorney General here includes an excerpt from the Great Falls Tribune, Great Falls, Montana, dated February 5, 1988, which carries an Associated Press story that the Secretary of State had ordered a new election for the two ballot measures. An applicant for a writ of mandate must establish a clear legal right to the writ and a violation of duty by the person or persons sought to be coerced. Benson v. School District No. 1 of Silver Bow County (1959), 136 Mont. 77, 344 P.2d 117. The Secretary here is performing the duty for which Mr. Marbut contends. Moreover, a writ of mandate will not lie to correct or undo an action already taken. State ex rel. Thompson v. Babcock (1966), 147 Mont. 46, 409 P.2d 808; Melton v. Oleson (1974), 165 Mont. 424, 530 P.2d 466.

In like matter, there is here no justiciable controversy for a declaratory judgment. In Muskrat v. United States (1911), 219 U.S. 346, 31 S.Ct. 250, 55 L.Ed. 246, the United States Supreme Court had before it a case in which Congress had passed legislation, and had instructed in the legislation that actions be brought before the Court of Claims and before the United States Supreme Court to determine the validity of the legislation. The Supreme Court found no actual controversy before it saying:

“This attempt to obtain a judicial declaration of the validity of the act of Congress is not presented in a ‘case’ or ‘controversy’ to which, under the Constitution of the United States, the judicial power alone extends. It is true the United States is made a defendant in this action, but it has no interest adverse to the claimants. The object is not to assert a property right as against the government, or to demand compensation for alleged wrongs because of action upon its part. The whole purpose of the law is to determine the constitutional validity of this class of legislation in a suit not arising between parties concerning a property right necessarily involved in the decision in question, but in a proceeding against the government in its sovereign capacity, and concerning which the only judgment required is to settle the doubtful character of the legislation in question. Such judgment will not conclude private parties, when actual litigation brings to the court the question of the constitutionality of such legislation . . .”

219 U.S. at 361-362, 31 S.Ct. at 255-256, 55 L.Ed. at 252.

In Montana, the requirement of justiciable controversy likewise applies to declaratory judgment actions:

“It has been held and we approve of the following statement of the principles applicable under the Uniform Declaratory Judgment Act:
“ ‘The courts have no jurisdiction to determine matters purely speculative, enter anticipatory judgments, declare social status, deal with theoretical problems, give advisory opinions, answer moot questions, adjudicate academic matters, provide for contingencies which may hereafter arise, or give abstract opinions. (Citing cases.) The Uniform Declaratory Judgment Act does not license litigants to fish in judicial ponds for legal advice.’ ” (Citing cases.)

Montana Department of Natural Resources v. Intake Water Company (1976), 171 Mont. 416, 440, 558 P.2d 1110, 1123; See Chovanak v. Matthews (1948), 120 Mont. at 525, 188 P.2d at 584.

The Relator contends that this Court has relaxed the requirement of adverse parties in such cases as Grossman v. State of Montana (Mont. 1984), [209 Mont. 427,] 682 P.2d 1319, 41 St.Rep. 804 and 42nd Legislative Assembly v. Lennon (1971), 156 Mont. 416, 481 P.2d 330. In Grossman, however, we maintained that the issues had to be “vigorously contended” and fully explored. In Lennon, although the legislature directed the filing, of the declaratory judgment through the Attorney General and the Secretary of State, the respondent, the Clerk and Recorder of Cascade County, Montana, vigorously contended both in oral argument and in brief, opposite positions to the Attorney General and the Secretary of State on the legal questions presented. There were no factual disputes.

While many cases support the rights of taxpayers, citizens or electors to have standing to bring actions against public officials for legal determinations of their respective rights, we have found no case granting standing to a complainant or applicant who shows no injury or threatened injury to himself through the act of a public official.

We hold, therefore, because of a lack of justiciable controversy, this Court has no jurisdiction of the relator’s application and proposed complaint.

The Secretary has now filed a motion that we grant Intervenor’s petition for intervention and that we denominate Intervenor as a party defendant and real party in interest. The motion is not well taken. Its effect would make the Intervenor the respondent as against Mr. Marbut and expose Mr. Marbut to costs in the event of a decision adverse to him. The cause would then be reduced to an argument between Mr. Marbut and the Intervenor as to the validity of the Secretary’s actions. The business of courts is to decide cases, not arguments. 6A Moore’s Federal Practice, p. 57-160 (1984), Declaratory Judgments, Section 57.15.

The lack of controversy is not cured by the appearance of the Intervenor. The Intervenor’s appearance is for the limited purpose of securing a dismissal, and it is inconceivable that where the court has no jurisdiction of the principal cause, the appearance of an intervenor creates jurisdiction. Moreover, Mr. Marbut’s response to the petition for intervention precludes granting the petition for intervention.

We hold that these proceedings must be dismissed and the application for intervention denied. We express no opinion whatsoever in this cause as to the validity of the actions undertaken by the Secretary of State respecting CI-27 and CI-30, nor as to whether the “next regular state-wide election” (Article XIV, Section 9(2), 1972 Montana Constitution is a primary or general election.

IT IS THEREFORE ORDERED:

1. The application for intervention herein is DENIED.

2. Relator’s application for an original proceeding herein is DISMISSED.

3. Copies hereof to Relator and all counsel of record.

DATED this 11th day of March, 1988.

s/J.A. Turnage, Chief Justice

s/John C. Sheehy, Justice

s/John Conway Harrison, Justice

s/William E. Hunt, Sr., Justice

s/R.C. McDonough, Justice

MR. JUSTICE WEBER,

dissenting:

We are concerned here with the extent of the initiative rights of the citizens of Montana. In the 1972 Constitution, the people of Montana reserved all political power to themselves. Mont. Const. Article II, Section 1 states:

“All political power is vested in and derived from the people. All government of right originates with the people, is founded upon their will only, and is instituted solely for the good of the whole.” By the same Constitution, the people of Montana reserved the right to amend the Constitution. Mont. Const. Article II, Section 2 states:
“The people have the exclusive right of governing themselves . . . They may alter or abolish the constitution and form of government whenever they deem it necessary.”

By a provision newly inserted in the 1972 Constitution, the people reserved the right to propose constitutional amendments by initiative, stating in Mont. Const. Article XIV, Section 9:

“(1) The people may also propose constitutional amendments by initiative. Petitions including the full text of the proposed amendment shall be signed by at least ten percent of the qualified electors of the state ....
“(2) The petitions shall be filed with the secretary of state. If the petitions are found to have been signed by the required number of electors, the secretary of state shall cause the amendment to be published as provided by law twice each month for two months previous to the next regular state-wide election.
“(3) At that election, the proposed amendment shall be submitted to the qualified electors for approval or rejection . . . .” (Emphasis supplied.)

These provisions emphasize the right of the people of Montana to amend the Constitution by initiative without going through any of the three branches of government. Our primary issue here is the extent of that right of initiative. Both CI-27 and CI-30 were certified by the Secretary of State to have the required number of signatures entitling the initiative to consideration at the “next regular statewide election”. A basic question is whether the people of Montana have a right to vote on these initiatives where the original votes have been found to be invalid because of the type of notice given by the office of the Secretary of State.

The majority opinion describes the application and proposed complaint filed by the plaintiff. It also describes the Secretary of State’s response to which was attached a proposed answer on his part. Next the opinion describes the Attorney General’s written response in which he concluded that justiciability is required in a declaratory judgment action and is not present in the current proceeding.

Reference is then made to the petition to intervene for the limited purpose of seeking dismissal of the action. The majority opinion points out that the petition to intervene was filed for the limited purpose of seeking dismissal of the action. I find it necessary to more carefully review the papers filed by these Petitioners in Intervention and the rules which apply in intervention. It is true that their petition does indicate that a request is made for an order granting them the status of intervening defendants limited at this time to the right to raise issues relating to the dismissal of the application and reserving the question of general participation. This is an interesting concept which is not provided for in our rules of procedure. The Petitioners in Intervention carefully set forth a description of the parties constituting that group, pointing out that the “Montanans for the Preservation of Citizens’ Rights” is an ad hoc group of individual Montana citizens, voters, and taxpayers formed to preserve and protect constitutional rights, that CI-30 “threatens to take away and impair these existing constitutional rights,” and that “[individual group members are, therefore, individually directly adversely affected by the proposed measure.” The next paragraph refers to the Montana State AFL-CIO and points out that their rights are threatened or jeopardized by the initiative measure. In a similar manner the Women’s Law Caucus is described as a unique group whose members are individually and collectively adversely affected or threatened by CI-30. Next a number of individual persons are named whose rights of suit are stated to be adversely affected by CI-30. In summary, the petition states that all of these Petitioners in Intervention were plaintiffs/relators in the prior case before this Court and as such “they have a keen and ongoing interest in the disposition of the present matter.” By the wording of this petition, the Intervenors have met the requirements of Rule 24(a), M.R.Civ.P. which grants a right to intervene as a matter of right when an applicant claims an interest relating to the subject of the action and is so situated that the disposition of the action may as a practical matter impair or impede the applicant’s ability to protect that interest. Further, the Petitioners in Intervention have followed the procedure required under Rule 24(c), M.R.Civ.P. which requires the presentation of a motion to intervene accompanied by a pleading setting forth their defense. Attached to their petition, the Intervenors have set forth an answer which responds to the complaint and petition on the part of plaintiff Marbut. This answer has been carefully drawn and demonstrates a real and significant controversy between the Petitioners in Intervention and Mr. Marbut.

In their petition for Intervention the petitioners state they “do not wish to supply the requisite adversity to the present collusive proceedings” and therefore ask that they be allowed to raise the issues relating to dismissal without being admitted as parties under the provisions of Rule 24. Petitioners in Intervention cite no authority for such an appearance under Rule 24. The parties seek a limited type of appearance while claiming the benefit of an intervention as a matter of right under Rule 24.

The Secretary of State has now filed a memorandum in which he points out that Rule 24, M.R.Civ.P. provides that a party who intervenes voluntarily is deemed to have appeared before the Court for all purposes. The Secretary of State requests that the motion to intervene by the Petitioners in Intervention be granted and that such petitioners be given “full party in interest” status. The Secretary of State does not cite any specific case authority for that position.

I conclude that the wording of Rule 24,. M.R.Civ.P. clearly warrants the issuance of an order approving the intervention of right by the Petitioners in Intervention. I further am unable to find anything in the Rules which justifies a petition to intervene for the limited purpose of seeking dismissal. I conclude there is a reasonable basis to enter an order of intervention.

The essence of the majority opinion is that there is no justiciable controversy between plaintiff Marbut and the Secretary of State and that the petition therefore should be denied. I do not take issue with the general authority which is quoted in the majority opinion defining the nature of the justiciable controversy which is required in various types of actions, including declaratory judgment proceedings. I do dispute the application of those rules of law to the present proceeding so far as CI-30 is concerned. I do agree with the holding of the majority so far as CI-27 is concerned because of the absence of real parties in interest in the issue regarding CI-27.

Our question is whether we should allow the filing of plaintiff Mar-but’s complaint and the answers by the Secretary of. State and the Petitioners in Intervention. The majority concludes there is an absence of a justiciable controversy and adverse parties. In Forty-Second Legislative Assembly v. Lennon (1971), 156 Mont. 416, 481 P.2d 330, an original proceeding was brought before this Court for declaratory judgment. The proceeding sought a determination of whether state and local officers could serve as delegates and whether the legislature could provide for non-partisan nomination and election of delegates to the Constitutional Convention. The parties plaintiff in that case were the Legislature itself and the Secretary of State. The sole defendant was the Clerk and Recorder of Cascade County. This Court pointed out in its decision granting a declaratory judgment:

“Here we have a presently existing bona fide, justiciable, legal controversy concerning the authority of the legislative assembly ... in enacting mandatory enabling legislation for a constitutional convention. Resolution of the issues presented here is necessary to eliminate or reduce a multiplicity of future litigation; to prevent interminable delay . . . and to eliminate needless expenditure of public funds . . . One of the basic purposes of the Montana Declaratory Judgments Act is to provide a procedure for advance determination of such issues, thereby eliminating these otherwise detrimental results.”

Lennon, 481 P.2d at 332-33. That is the real basis on which this Court reached its declaratory judgment. No reference was made to the absence of any real parties in interest to establish a controversy. Clearly the Clerk and Recorder of Cascade County whose duties in the course of an election are largely ministerial could hardly be expected to afford the type of defense and the presentation of justiciable issues required under the various cases cited in the majority opinion. This Court concluded that because of the significant issues in the formation of the Constitutional Convention, it should take jurisdiction for declaratory judgment purposes even though there was no justiciable controversy with the named defendant and even in the absence of “real” parties in interest. This broad statement of the powers of this Court was established prior to the enactment of the 1972 Constitution.

Grossman v. State, Dept. of Natural Resources (Mont. 1984), [209 Mont. 427,] 682 P.2d 1319, 41 St.Rep. 804, was an original proceeding brought by a single taxpayer seeking a declaration that statutes allowing the issuance of coal severance bonds were unconstitutional. The unanimous opinion of the Court contains an extensive discussion of the rights of the citizen, resident and registered elector to bring this original declaratory judgment proceeding before the Supreme Court. The Court concluded:

“We therefore hold that this Court does have original jurisdiction to accept declaratory judgment proceedings where the issues have impact of major importance on a state-wide basis, or upon a major segment of the state, and where the purpose of the declaratory judgment proceedings will serve the office of a writ provided by law . . Grossman, 682 P.2d at 1321. The Court discussed at some length the questions raised as to whether or not a single citizen had the right to bring such a proceeding and concluded that the Court had authority over both the subject matter and the parties. In a key statement which I find directly applicable to the present proceeding, the Court stated:
“We should without hesitancy recognize this case for what it appears to be: a test case designed to obtain a final judgment on the validity of coal severance tax revenue bonds so that if valid, the bonds will be marketable. We will no longer be qualmish about jurisdiction in a bond issuance case. When the issues are fairly stated, fully explored and vigorously contended, as they appear here, we have a justiciable controversy suitable for final resolution by this Court. Legal niceties must bend on occasion to the reality of the market. The living law moves with the times. (Emphasis added.) Grossman, 682 P.2d at 1326.

I would agree that our rules of procedure do allow the dismissal of the petition as to CI-30 on the grounds of the absence of a justiciable controversy and the absence of real parties in interest. However, in reaching that conclusion, I believe we are disregarding the broad principles set forth in both Lennon and Grossman.

The people of Montana signed sufficient petitions to qualify CI-30 for a state-wide election under Article XIV, Section 9 of the Constitution. Next the people approved CI-30 in the 1986 general election. This Court concluded that the notices were insufficient and voided the 1986 vote. A critical issue remains: Is CI-30 still “alive” so that the people of Montana retain the right to vote on CI-30 at the “next regular state-wide election?”

A companion issue of major importance is whether the “next regular state-wide election” is the primary election of June 7, 1988? If CI-30 is to be considered at that primary election, then the various notices must commence in April 1988. Time is critically significant. If CI-30 must be presented for a vote at the 1988 primary election, but there is a failure for any reason to properly present the same for vote, the issue may become moot without an opportunity on the part of the people of Montana to cast their vote.

I conclude that the interest and involvement of many citizens of Montana in the initiative process as it relates to CI-30 justifies the conclusion that we are dealing with an issue of major importance on a state-wide basis. I conclude this meets the test of Grossman where this Court stated that even though Grossman was a “test case” designed to obtain a judgment, this Court would accept jurisdiction. I would apply the Grossman rationale to this case and conclude that here the issues are fairly stated, can be fully explored and vigorously contended, and we have a justiciable controversy which requires that “legal niceties must bend on occasion to the reality of the market.”

Rather than denying the petition of the plaintiff, as was done in the majority opinion, I would grant the petition and make the following provisions: I would direct the Clerk of this Court to immediately file the complaint of plaintiff Marbut and also to immediately file the answers on the part of the defendant Secretary of State and the Plaintiffs in Intervention. I would further set an abbreviated schedule of briefing and argument in order that an appropriate decision could be made with regard to the placement of CI-30 on the 1988 primary election ballot.

MR. JUSTICE GULBRANDSON concurs in the foregoing dissent.