Can the DC Auditor demand to see the Public Service Commission's internal deliberations on a utility rate case?

Plain-English summary

In November 1983, the DC Public Service Commission decided a major rate case for Chesapeake and Potomac Telephone Company (PSC Order No. 7924 in Formal Case No. 798). After the order came down, the DC Auditor wrote to the Commission's chairperson with five questions: how does the Commission evaluate rate increases, are all rate-increase applications handled the same way, what are the rules and regulations, what laws authorize the Commission's existence and processes, and finally a request for the Commission's "minutes, staff analysis, and memoranda" supporting the November 10 decision.

The Commission cooperated on the procedural questions but declined to hand over the deliberative materials behind the C&P decision. The Auditor escalated, asking the Mayor in October 1984 to direct the Commission to cooperate. Mayor's Office Director of Policy and Program Evaluation Gladys Mack asked Corporation Counsel Inez Reid for a legal opinion.

Reid drew the line for the Auditor's audit authority. The Auditor has broad authority under D.C. Code § 47-117 to audit "accounts and operations" of any DC government agency, which the legislative history says includes "performance and outputs" as well as financial transactions. So the procedural questions (how the Commission decides cases generally, what rules and laws govern it) are clearly within audit scope. The deliberative question (how this Commission decided this particular contested case) is not.

The reason is the quasi-judicial deliberative privilege. When an agency adjudicates a contested case (which a rate case is), it functions like a court. Forcing it to disclose its internal deliberations destroys the very thing that makes deliberation work: the free flow of discussion among decisionmakers, the exchange of ideas, the open consideration of differing views. Jordan v. District of Columbia and Dupont Circle Citizens Ass'n v. D.C. BZA recognized this confidentiality. Congress recognized it federally in the Sunshine Act, which exempts agency adjudications from open-meeting requirements. The DC open-meeting requirement (D.C. Code § 1-1504) does not have an explicit exemption, but the courts read one in.

The Mayor should not direct the Commission to disclose deliberations to the Auditor. The Auditor's interest in oversight does not outweigh the structural need for protected adjudicative deliberation.

Currency note

This opinion was issued in 1985. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Why are deliberations protected when the agency is not a court? A: Because in a contested case, the agency is acting in a quasi-judicial capacity, and the same reasons that protect judicial deliberations apply. Forcing disclosure of how decisionmakers reached a result chills the candid exchange of views and weakens the quality of decisions. Jordan v. District of Columbia and Canney v. Board of Public Instruction (the Florida dissent that Jordan quotes) both make this point.

Q: Did the opinion address when a court could order disclosure? A: No. It addressed the Auditor's request and recommended that the Mayor not direct the Commission to disclose its deliberations.

Q: Did the opinion decide whether these materials could be requested under FOIA? A: No. It discussed the Auditor's statutory authority and confidentiality of contested-case deliberations, but did not analyze a FOIA request.

Q: Does the Auditor have other tools to assess decision quality? A: The opinion said the Auditor could ask about the Commission's procedures, rules, governing law, and general handling of rate-increase applications. It did not authorize access to the deliberations behind a particular contested-case decision.

Q: Does this opinion establish the Auditor's access today? A: No. It addressed the Auditor's authority under the law as understood in 1985. It does not establish current law or later audit practice.

Q: Does this protect ex parte communications too? A: The opinion addressed the Commission's internal deliberations in a particular contested case. It did not decide how ex parte communications should be handled.

Background and statutory framework

The DC Auditor's authority comes from § 455 of the Self-Government Act (D.C. Code § 47-117), which directs the Auditor to "audit the accounts and operations of the government of the District" and gives access to "all books, accounts, records, reports, findings and all other papers, things, or property" of any DC government agency or instrumentality necessary to facilitate the audit.

The legislative history clarifies the scope. Both the House District Committee report and the Conference Committee report stated that the audit's purpose is to ensure "the proper and legal control and expenditure of District funds." The Auditor/Council relationship is modeled on the GAO/Congress relationship. The phrase "accounts and operations" was chosen at GAO's suggestion (over "financial transactions") to clarify that the audit covers "performance and outputs" as well as financial transactions.

The Public Service Commission performs two kinds of work. Some is policymaking and rulemaking (developing regulatory frameworks, setting general rules for utilities). Some is contested-case adjudication (deciding rate-increase petitions, complaint cases, certificate disputes between specific parties). The two have different protective regimes.

For rulemaking and general operations, the Auditor's authority extends fully. The Auditor can ask: what procedures do you follow, what rules govern utilities, what laws authorize your work, how do you allocate staff and resources to cases. Those are the kinds of questions the Auditor's letter posed in numbers 1, 2, 4, and 5, and the Corporation Counsel said all four are within scope.

For contested-case adjudication, the Auditor's authority is bounded by the deliberative-process privilege. The Sunshine Act, 5 U.S.C. § 552b(e)(10), exempts from federal open-meeting requirements "disposition by an agency of a particular case of formal agency adjudication" or determinations on the record after an opportunity for hearing. The DC open-meeting requirement (Self-Government Act § 742, D.C. Code § 1-1504) does not have an explicit equivalent exemption, but the DC Court of Appeals has read one in. Jordan v. District of Columbia, 362 A.2d 114, 119 (D.C. 1976), draws a sharp distinction between "regular activities of an agency" and quasi-judicial activities, observing that depriving an administrative body of free deliberation would "shut off the free flow of discussion among them and an exchange of ideas and an open discussion of differing views to the end that a fair and just result may be reached."

The Corporation Counsel concluded that the deliberative confidentiality interest outweighs the Auditor's interest in disclosure, particularly because the deliberations are remote from the statutory audit purposes (the proper and legal control and expenditure of District funds). The Auditor's question 3 (asking for "Commission minutes, staff analysis, and memoranda" supporting the November 10 decision) ran afoul of the privilege.

The opinion concludes with the Mayor's role. The Mayor should not direct the Commission to disclose deliberations to the Auditor. The Auditor's authority under § 47-117 has limits, and respecting those limits is part of the Mayor's responsibility for the orderly operation of DC government.

Citations and references

Statutes:

• DC Self-Government Act § 455, Pub. L. 93-198, 87 Stat. 803, D.C. Code § 47-117
• DC Self-Government Act § 742, D.C. Code § 1-1504 (open meetings)
• 31 U.S.C. § 712(1) (GAO authority)
• Government in the Sunshine Act, 5 U.S.C. § 552b(e)(10)

Cases:

• Jordan v. District of Columbia, 362 A.2d 114 (D.C. 1976), quasi-judicial deliberations protected
• Dupont Circle Citizens Ass'n v. D.C. Board of Zoning Adjustment, 364 A.2d 610 (D.C. 1976), same principle for BZA
• Canney v. Board of Public Instruction, 278 So. 2d 260 (Fla. 1973), Florida dissent quoted in Jordan

License

This opinion is published by the Office of the Attorney General for the District of Columbia. Per the DC.gov terms of use, content is licensed under Creative Commons Attribution 3.0, which permits commercial use, redistribution, and modification with attribution.

Source

• Original PDF: https://oag.dc.gov/sites/default/files/2018-02/Opinion-July-2014-Public-Service-Commission.pdf

Original opinion text

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~nn~rum~ut of t4~ itstrtrt of <ttnlumbta OF.FICE OF THE CORPORATION COUNSEL DISTRICT BUILDING WASHINGTON.

D. C.

20004

IN REPLY REFER TO:

LCD:L&O:TFB:pmc
(85-12)
April 16, 1985
OPINION OF THE CORPORATION COUNSEL
SUBJECT: The Authority of the District of Columbia Auditor to Review the Operations of the Public Service Commission.

Ms. Gladys Mack
Director
Office of Policy and Program"
Evaluation
1350 Pennsylvania Avenue, N.W.
washington, D. C.
20004
Dear Ms. Mack:
This is in response to your memorandum dated January 10, 1985, requesting an opinion on the authority of the District of Columbia Auditor to review the activities of the Public Service Commission ("the Commission") and what action the Mayor should take in response to the Auditor's letter dated October 5, 1984, in which the Audfto.r..requests that the Mayor, inter alia, "enforce the ••• Auditor's authority ••• and direct the Public Service Commission to cooperate" with the Auditor in his review of PSC deliberations with respect to [PSC] Order No. 7924." (The Commission entered P.S.C. Order No. 7924 in Formal Case No. 798, a Chesapeake and Potomac Telephone Company rate proceeding, on November 10, 1983.) Shortly after the Commission enteredPSC order No. 7924, the Auditor wrote to the chairperson of the Commission, asking: 1.

Does the Public Service Commission of the District of Columbia (Commission) follow a standard procedure for evaluating, voting on and awarding rate increases applied for by utility companies? Please describe the process by which rate increases are reviewed.

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2.

Are all utility rate increase applications handled by this procedure?

3.

please provide Commission minutes, staff analysis, and memoranda that support the November 10 decision.

4.

What are the rules and regulations adopted by the Commission?

5.

What "laws" authorize the Commission's current existence, [sic] and deliberative processes?

I have concluded that the Auditor's authority extends to questions 1, 2, 4, and 5 posed to the Commission: but that the Auditor's authority does not extend to the subject matter of question 3, the deliberations by which the Commission decides a contested case. I have further concluded that it would be inappropriate for the Mayor to "direct the Public Service Commission to cooperate with the Auditor in his review of PSC deliberations with respect to [PSC] Order No. 924." To begin with, section 455 of the District of Columbia SelfGovernment Government and Governmental Reform Act, Pub. L. 93-198, 87 stat. 803 (1973), D.C. Code § 47-117 (1981), gives the Auditor authority to conduct an "audit of the accounts and operations of the government of the District." Sec. 455 (c) further provides: The District of Columbia Auditor shall have access to all books, accounts, records, reports, findings and all other papers, things, or property belonging to or in use by any department, agency, or other instrumentality of the District government and necessary to facilitate the audit. Sec. 455 of the Self-Government Act clearly gives the Auditor authority to examine any records or papers of the Commission "necessary to facilitate the audit." (Cf. Opinion of the Corporation Counsel, dated December 23,-r983, affirming the Auditor's authority to audit the operations of and funds managed by the District of Columbia Retirement Board.) In order to determine what records or papers of the Commission are "necessary to facilitate the audit," .it is necessary to consider the intended scope of the audit as set forth in the legislative history of the Self-Government Act. 1/ 1/ See House Committee on the District of Columbia, Background and Legislative History of H.R. 9056, H.R. 9682, and Related Bills Culminating in the District of Columbia Self~Government.and Governmental Reorganization Act, 93d Cong., 2d Sess. (Comm. Print (l974) (cited hereafter as "Legislative History").

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Both the House District Committee and the Conference Committee reporting out the Self-Government Act stated that the purpose of the audit is to assure "the proper and legal control and expenditure of District funds." Legislative History 1470, 3037. Both Committees also stated that the "Auditor/Council relationship is modeled after the GAO/Congress relationship." Ibid. The statutory authorities of the Auditor and the General Accounting Office are set forth in slightly different terms. While the Auditor is directed to audit "the accounts and operations of the government," GAO is directed to "investigate all matters related to the receipt, disbursement, and use of public money." 31 U.S.C.A. § 712(1)(1983). It appears that the House District Committee defined the Auditor's authority in terms of "accounts and operations ll (in preference to "financial transactions") at the suggestion of GAO, in order to "clarify that such audit will cover the performance and outputs as well as financial transactions of government programs." Legislative History 1061. This suggestion is consistent with the final report language, supra, that the purpose of the audit is to assure "the proper and legal control and expenditure of District Funds." Questions 1, 2, 4, and 5, posed by the Auditor, ask the Commission to describe its procedures and legal authority. Thus, they all appear to be within the intended scope of the Auditor's authority to assure the proper and legal control and expenditure of District funds. Question 3, however, asks the Commission to divulge the deliberations by which it decided a particular contested case. This question is not directly related to the Commission'S control and expenditure' of public funds or to any measurement of the Commission's performance and output. The confidential nature of such deliberations was recognized by Congress when it exempted from the requirements of the Government in the Sunshine Act, Pub. L. 94-409, 90 Stat. 1241 (1976), 5 U.S.C.A. § 552b (e)(10)(1980): "disposition by an agency of a particular case of formal agency adjudication ••• or
••• a determination on the record after an opportunity for hearing." When it had earlier adopted a similar open meeting requirement for District agencies, Congress did not include such an explicit exemption. See section 742 of the self-Government Act, D.C. Code § 1-1504. However, the District of Columbia Court of Appeals has implied such an exemption, strongly stating the need for the confidentiality of deliberations in contested cases: The regular activities of an agency and those which are quaSi-judicial are altogether different •••• The result of depriving an administrative body of free deliberation amoDg themselves, just as a regular judicial body or jury may do, is to shut off the free flow of discussion among them and an exchange of ideas and an open discussion of differing views to the end that a fair and just result may be

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reached by the body based upon the evidence and arguments at the hearing. Jordan v. District of Columbia, 362 A.2d 114, 119 (D.C. 1976), quoting dissent in Canney v. Board of Public Instruction, 278 So. 2d 260, 264 (Fla. 1973). See also Dupont Circle Citizens Ass'n v. D.C. Board of Zoning Adjustment, 364 A.2d 610 (D.C. 1976). The need for confidentiality of such deliberations, in my view, outweighs the Auditor's interest in their disclosure, particularly in light of the remoteness of such deliberations from the statutory purposes of an audit. Sincerely,
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Inez Smith Reid
Corporation Counsel, D.C.