SOUTHERN CALIFORNIA EDISON COMPANY v. PUBLIC UTILITIES COMMISSION

Filed 6/26/06

CERTIFICATED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION THREE

ORIGINAL PROCEEDING for review of a decision by the Public Utilities Commission. Annulled in part.

Stephen E. Pickett, James M. Lehrer; O'Melveny & Myers, Gordon E. Krischer and Joshua A. Shapiro for Petitioner.

W. Davis Smith and Georgetta J. Baker for San Diego Gas & Electric Company and Southern California Gas Company as Amici Curiae on behalf of Petitioner.

Randolph L. Wu, Dale Holzschuh and Darwin E. Farrar for Respondent.

Altshuler, Berzon, Nussbaum, Rubin & Demain and Scott A. Kronland for Real Party in Interest State Building and Construction Trades Council of California, AFL‑CIO.

Reich, Adell, Crost & Cvitan, Alexander B. Cvitan and Andrew L. Birnbaum for Real Party in Interest Southern California District Council of Laborers.

Weinberg, Roger & Rosenfeld, Sandra R. Benson, Patricia M. Gates and Roberta D. Perkins for Real Party in Interest Northern California Basic Crafts Alliance.

Adams Broadwell Joseph & Cardozo, Marc D. Joseph and Gloria D. Smith for Real Parties in Interest California State Pipe Trades Council and International Brotherhood of Electrical Workers, Local 1245.

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Southern California Edison Company (Edison) challenges a decision by the Public Utilities Commission (PUC) that certain public utilities must require the payment of prevailing wages to workers on energy utility construction projects. Edison contends (1) the National Labor Relations Act (NLRA) (29 U.S.C. § 151 et seq.) preempts the decision; (2) the PUC committed a prejudicial abuse of discretion by violating its own procedural rules concerning the scope of issues addressed in the rulemaking proceeding; (3) the PUC provided no meaningful opportunity to respond to the proposed rulemaking and therefore denied due process; and (4) the evidence in the record does not support the decision. We conclude that the NLRA does not preempt the decision but that the PUC did fail to proceed in the manner required by law in that it violated its own procedural rules. We therefore annul the decision in part, and need not address Edison's other contentions.

PROCEDURAL BACKGROUND

1. Parties

The PUC is the administrative agency responsible for regulating public utilities in the State of California. (Cal. Const., art. XII, §§ 5, 6; Pub. Util. Code, § 701.) Edison is an energy public utility. The real parties in interest are labor unions and other labor organizations.[1]

2. Order Instituting Rulemaking and Scoping Memo

The PUC issued an Order Instituting Rulemaking on September 4, 2003, proposing the adoption of rules consistent with rules governing state and federal public works contracts prohibiting â€