Before the public service commission of maryland in the Matter of the Mid-Atlantic : Petroleum Distributors Association

RESPONSE TO MOTION TO STRIKE

By and through its counsel Gary R. Alexander, Chantel R. Ornstein and the Law Offices of Alexander&Cleaver, P.A., the Mid-Atlantic Petroleum Distributors Association (“MAPDA”) and the Mid-Atlantic Propane Gas Association (“MAPGA”)(collectively “Complainants”) hereby submit this Response to Motion to Strike and Response to Supplement to Motion to Strike filed jointly on November 16, 2001 and February 16, 2002, respectively, by Southern Maryland Electric Cooperative, Inc. (“SMECO”) and Choptank Electric Cooperative, Inc. (“Choptank”)(collectively the “Cooperatives”).

1. 
   Response to Motion to Strike Certain Testimony and Exhibits of Mr. Burnice C. Dooley
   

The Cooperatives argue that certain portions of the Initial Direct Testimony of Burnice Dooley “is not directed at ‘establish[ing] the facts alleged to constitute a violation of the law’ as is required.” Motion to Strike, p. 3. More specifically, the Cooperatives move to strike the following segments of Dooley’s Initial Direct Testimony and exhibits: page 8, lines 4-12; as it relates to regulatory notification of the Cooperatives investment in non-regulated activities; page 8, lines 14-23 as it addresses identified problems with the Cooperatives’ investment in MACS; page 10, lines 15-23 as it pertains to whether the Cooperative investments in non-regulated business should be subject to the same standards as an investor owned utility; page 11, line 1- page 12, line 3 concerning diversification into unrelated business activities; page 14, lines 15-20 in connection with the significance of member capital accounts with SMECO and Choptank; page 17, lines 17-22 on the subject of photographs taken of vehicles belonging to the business activities of MACS parked on Choptank facilities; page 18, line 20 - page 19, line 5 as to information being distributed which appears to advertise Aero, MACS and the Cooperatives jointly; and page 20, lines 1-18 about Dooley’s opinion concerning the Commission’s requirements as part of the evidentiary record in the case.

The Cooperatives are incorrect in asserting that Mr. Dooley has not established the facts alleged to constitute a violation of the law as required by COMAR 20.07.02.04. The Courts have determined that:

“Unquestionably, the facts upon which the opinion of an expert witness is predicated must be stated, Fink v. Steele, 166 Md. 354, 363, 171 A. 49; (1934); this is so because the opinion of an expert must rest upon facts legally sufficient to form a basis for his conclusion, Strickell v. City of Baltimore, 252 Md. 464, 474, 250 A.2d 541 (1969). If the facts relied upon for the expert opinion are not revealed, it becomes impossible to ascertain whether the conclusion drawn from them possesses sufficient probative force; or is not mere conjecture or speculation.” Dickinson-Tidewater v. Supervisor, 273 Md. 245, 253, 329 A.2d 18 (1974).

After a careful review of the record in this case, “the only notification to the Commission [was] a one-page letter notifying the Commission of the investment in MACS.” Pursuant to Public Service Commission Order No. 74038 in Case No. 8747, “utilities shall inform the Commission of all new non-regulated activities on a time-concurrent basis. The filing shall include information regarding the level of company assets committed to the venture. In their annual reports to the Commission, utilities shall also indicate the total level of company assets involved in all non-utility operations. . . ‘this notification requirement will enable [the Commission] to determine whether the non-utility activities will affect regulated services, and to take timely steps to protect utility services, if necessary.’” Order No. 74038 at 52. Additionally, “the [C]ooperatives have refused to answer discovery related to the decision to acquire an interest in MACS.” Dooley Initial Direct Testimony at 6-7. Here, Mr. Dooley clearly establishes facts legally sufficient to form the basis for his conclusion.

Additionally, contrary to the Maryland Electric Cooperative Act of 1941 codified, 1976 Session Laws (Chapter 179 of the 1976 Laws of Maryland), Section 2 which provides guidelines with respect to the purpose of electric cooperatives such that the purpose is “to supply electric energy and promote and extend its uses thereof”, Mr. Dooley again opines that MACS was created by SMECO and Choptank to venture into “unrelated business activities namely, selling and distributing propane and other fuels which competes with and in some cases could be called the business antithesis of supplying electricity.” Id. at 7.
Finally, on page 9 of Mr. Dooley’s Initial Direct Testimony, he provides the facts for the basis of his testimony on page 10; the basis for his arguments on page 11-12 is attached as Exhibit BCD –4; his conclusions at the bottom of page 14 are clearly drawn from his extensive knowledge and experience in addition to his review of 5 years of annual reports; his testimony on pages 17 - 18 is clearly based Exhibits BCD – 8 - 10; and his observations on page 20 are based upon his extensive review of the facts obtained through this proceeding. Furthermore, the arguments made by the Cooperatives that the photographs in Exhibit BCD –8 are hearsay and should be stricken is inappropriate. The Commission is not bound by the rules of evidence or procedure (PUC § 3-101(b)) and photographs are considered demonstrative evidence and are admissible. See Maryland Evidence Handbook, 2^nd Ed., J.F. Murphy, Jr. § 1102 (1993). For these reasons, the Cooperatives Motion to Strike the above-mentioned portions of Mr. Dooley’s Initial Direct Testimony should be denied.

II. Response to Motion to Strike Each of the Eight Statements of Certain Officers and Members of the MAPDA/MAPGA
A. Opinion Testimony of Lay Witness is Permissible

The Cooperatives argue that the eight statements offered by the individual members of MAPDA and MAPGA should be stricken as they “are in no sense proper testimony or evidence in this proceeding”, and rely upon the Court of Appeals decision in Bohnert v. State, 312 Md. 266, (1998). Motion to Strike, p. 3. The Court’s reasoning in Bohnert clearly does not apply in this instance. In Bohnert, the Court held that the trial judge erred in admitting the opinion testimony of an expert witness that related to the credibility of another witness. Id. at 278. In other words, the Court excluded the expert’s testimony because the expert’s testimony was based solely on the conclusion that one witness was telling the true and another was lying, as indicated by the following: “The opinion of Temple that Alicia in fact was sexually abused was tantamount to a declaration by her that the child was telling the truth and that Bohnert was lying. In the circumstances here, the opinion could only be reached if the child’s testimony were believed and Bohnert’s testimony disbelieved”. Id at 278-79.

In the present case, the member statements are not being offered as expert testimony, they are lay witnesses submitting statements in the same manner as any other interested person is permitted to do in a proceeding. In accordance with Rule 5-701 of the Maryland Rules of Evidence reads in pertinent part: “if the witness is not testifying as an expert, the witness’s testimony in the form of opinions or inferences is limited to those opinions or inferences which are (1) rationally based on the perception of the witness . . .” The member statements submitted in this proceeding are rationally based on the witness’s perceptions as is required under Rule 5-701. The Cooperatives also argue that the member statements are improper as they are not set forth in the form of testimony. Motion to Strike, p. 11. This argument is also unjustified as there is no requirement under Rule 5-701 regarding the format in which the lay testimony is submitted. These eight witnesses are customers of the Cooperatives and business owners within the Cooperatives territories, qualifying them as interested persons and aggrieved persons and provided them the right to offer testimony in an evidentiary proceeding. Pursuant to PUC §3-107(1), parties are permitted to present evidence in a proceeding before the Commission. The judiciary has ruled that “Any interested person shall the right to submit oral or written testimony at the hearing . . . [t]he interested persons . . . are the same class of persons who can qualify as ‘aggrieved persons’” Hyson v. Montgomery County, 242 Md. 55, 67, 217 A.2d 578 (1966).

It is clear in this instance that the Cooperatives have provided no justification for excluding the statements of the eight members and the Motion to Strike should therefore be denied.

B. Administrative Agencies are Not Bound by the Technical Rules of Evidence
The Cooperatives also challenge the admissibility of certain statements by officers and members of MAPDA and MAPGA, signifying that they “are unsworn, unsupported arguments by persons who are not parties to this proceeding, are not presenting testimony, and are not subject to cross-examination.” Motion to Strike, p. 2. However, these witnesses are available for cross-examination, clearly satisfying the basic rules of fairness to the parties as addressed by the Court in American Radio-Telephone Serv., Inc. v. Public Service Commission, 33 Md. App. 423 (1976) and cited by the Cooperatives. Motion to Strike, FN 1. Further, the procedural schedule for this matter was altered specifically to allow the Cooperatives to conduct discovery and prepare for cross-examination of these eight witnesses. This alteration provides that even though “[a]dministrative agencies are not bound by the technical rules of evidence and all of the procedures afforded in a trial in a court of law” the basic rules of fairness to parties are clearly being met. Hyson, at 69, Dickinson-Tidewater at 251-54.

CONCLUSION

For the foregoing reasons, the Complainants respectfully requests that the Motion to Strike filed in this proceeding by denied.

Respectfully submitted,

_______________________

GARY R. ALEXANDER

CHANTEL R. ORNSTEIN

54 State Circle

Annapolis, MD 21401

410-974-9000

410-974-9002 (fax)