COMMISSION In the Matter of Determining the) Proper Classification of: ) ) DOCKET NO. UT-971515 UNITED & INFORMED CITIZEN ) VOLUME 1 ADVOCATES NETWORK ) Pages 1 - 32 ------------------------------- ) A pre-hearing conference in the above matter was held on November 18, 1997 at 9:30 a.m. at 1300 South Evergreen Park Drive Southwest, Olympia, Washington, before Administrative Law Judge MARJORIE R. SCHAER. The parties were present as follows: U S WEST COMMUNICATIONS, INC. by PETER BUTLER, Attorney at Law, 1600 7th Avenue, Room 3206, Seattle, Washington 98191. THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION STAFF, by SHANNON SMITH, Assistant Attorney General, 1400 South Evergreen Park Drive Southwest, Olympia, Washington 98504. UNITED & INFORMED CITIZEN ADVOCATES NETWORK, by J. BYRON HOLCOMB, P.O. Box 10069, 9596 Green Spot Place NE, Bainbridge Island, Washington 98110. GTE NORTHWEST, INCORPORATED, by TIMOTHY J. O'CONNELL, Attorney at Law, 1800 41st Street, Everett, Washington 98201. Cheryl Macdonald, CSR Court Reporter P R O C E E D I N G S JUDGE SCHAER: The hearing will come to order. This is a hearing in docket No. UT-971515, which is a classification proceeding brought by the Washington Utilities and Transportation Commission against United & Informed Citizen Advocates Network to determine whether United and Informed Citizen Advocates Network is conducting business as a telecommunications company subject to the regulation of the Commission, or has performed or is performing any act requiring registration or approval of the Commission without securing the registration or approval required for such operations by RCW 80.36.350. This is a pre-hearing conference that was set by notice of pre-hearing conference dated October 28, 1997. It's taking place on November 18, 1997 in Olympia, Washington before Administrative Law Judge Marjorie Schaer. We had some discussion off the record, and I indicated that we would take appearances, and then we were going to take a motion by counsel for U & I CAN to disqualify me as the hearing officer in this proceeding. After we have dealt with that motion then we will determine how to move forward with the remainder of this hearing. So let's start by taking appearances beginning with the appearance of respondent United and Informed Citizen Advocates Network, please. MR. HOLCOMB: Thank you, Judge Schaer. I'm Byron Holcomb, H O L C O M B. I'm the attorney here for United and Informed Citizen Advocates Network, a nonprofit corporation. JUDGE SCHAER: Your address, please. MR. HOLCOMB: Post Office Box 10069, Bainbridge Island, Washington 98110. JUDGE SCHAER: For the Commission staff, please. MS. SMITH: Shannon Smith, assistant attorney general, 1400 South Evergreen Park Drive Southwest, P.O. Box 40128, Olympia, Washington 98504-0128. JUDGE SCHAER: Thank you, and for U S WEST, please. MR. BUTLER: Morning, Your Honor. Peter Butler on behalf of U S WEST. Also appearing here and on behalf of U S WEST is Mr. Mark Reynolds. JUDGE SCHAER: Your address, please. MR. BUTLER: 1600 Seventh Avenue, Room 3206, Seattle, Washington 98191. JUDGE SCHAER: Thank you. For GTE, please. MR. O'CONNELL: Thank you, Your Honor. Timothy J. O'Connell attorney for GTE Northwest, Incorporated, 1800 41st Street, Everett, Washington 98201. JUDGE SCHAER: And I believe at this time you had a motion that you wished to bring, Mr. Holcomb. MR. HOLCOMB: Yes, Judge Schaer. We would move to disqualify you as the administrative law judge in this proceeding, and the reason for that is that in a prior proceeding UT-960659 and in your second supplemental order dated September 17, 1997 you're referring to page 7 and on to page 8 of your order of that date, you have made a finding that U & I CAN does not operate a private telecommunications system. In this docket No. UT-971515 the issue is whether U & I CAN is required to register under RCW 80.36.350. Our position and subsumed in that is that the Commission can find under RCW 80.36.370 that we are a private telecommunications system not subject to registration. Because you have made a prior finding on the issue that U & I CAN is not a private telecommunications system and that being one of the issues of the proceeding under docket No. UT-971515 that you should be disqualified from further proceedings because you have prejudged this matter. Thank you. JUDGE SCHAER: Any statement from Commission staff? MS. SMITH: Without having very much time to consider this motion, our response is that there is no -- there are no grounds to disqualify Judge Schaer in this matter simply because of a prior ruling before this Commission. If parties were allowed to move to disqualify ALJs at this Commission because of prior adverse rulings, I don't believe that there would be any occasion where any ALJ would ever be able to proceed over a Commission matter because parties come before the ALJs in these cases multiple times and often adverse rulings are granted in those cases. And finally I don't see any bias or prejudice or interest on the part of this administrative law judge simply because an adverse ruling was made to U & I CAN. This isn't a situation where, as in Superior Court, parties are allowed to file affidavits of prejudice against judges. This is a situation where parties must show actual bias or prejudice or interest on the part of the administrative law judge and no showing has been made by U & I CAN in this case. JUDGE SCHAER: Did either of the intervenors wish to address the motion? MR. BUTLER: Your Honor, Peter Butler on behalf of U S WEST. We support counsel's position, staff's position. I don't believe that motion to disqualify the judge is appropriate in this matter. MR. O'CONNELL: Thank you, Your Honor. Timothy O'Connell again for GTE. I also support staff's analysis, and I may add that as a legal matter the standards by which a judge should rule on a motion to recuse him or herself are fairly well established under the federal case law. The fact that a judge may have some acquaintance with the facts of the matter or experience with the parties is not grounds for disqualification or recusal if the judge's experience or the acquaintance with the facts of the parties arises from hearings of record. And that is the idea, then, that because you have previously entered an order involving these parties and involving some of the same facts that you should be disqualified, that theory is completely contrary to established case law, again, arising in the federal system predominantly because of the, as counsel for staff noted, the affidavit of prejudice that is available in state courts. And when we look to the federal case law this motion is wholly without basis. We would urge its rejection. MR. HOLCOMB: May I respond? JUDGE SCHAER: Just a moment, please. Your response, Mr. Holcomb. MR. HOLCOMB: Most of my practice is federal practice, and I can respond to what Mr. O'Connell just said. What he says as a general is fine, but what he doesn't say is that specifically where a judge has ruled on a matter which is an issue between the same parties at this proceeding that judge has to disqualify himself as having prejudged the matter. All three parties speak in general terms about disqualification. We're talking -- specifically in this case one of the issues is whether U & I CAN should be found to be a private telecommunications system. With these same parties present you have found in a companion action 960659 that specifically on the pages that I cited that they are not a private telecommunications system. On that basis we have the very strong and specific grounds to disqualify you from further hearing in this proceeding. JUDGE SCHAER: Do you have any citations to the federal authority on that, sir? MR. HOLCOMB: Didn't realize you were going to be our administrative judge today. I don't have any specific citations with me. JUDGE SCHAER: I'm going to take about 15 minutes to consider this matter and then come back, so we'll be off the record until 10:00. (Recess.) JUDGE SCHAER: Let's be back on the record. Before our recess there had been a motion brought by Mr. Holcomb on behalf of U & I CAN to disqualify me in this proceeding. My understanding of the basis for the motion was the belief of this party that I had prejudged information that is going to be an issue in this proceeding and a ruling that I had made in another proceeding involving U & I CAN. The response of Commission staff and the other parties was that a prior ruling does not disqualify because it does not provide a showing of bias, prejudice or interest by the hearing officer. There was some discussion by both counsel for GTE and counsel for U & I CAN about certain federal precedent but none of that information was available to be provided to me in any greater detail in the hearing room this morning. I have reviewed RCW 34.05.425 regarding grounds for disqualification of a hearing officer, and I have determined that I should not disqualify myself in this proceeding for the following reasons: The rule provides that a hearing officer may be disqualified if there is a showing of bias, prejudice or interest against a party. What has been brought forward regarding an allegation of bias, prejudice or interest is a ruling that was made in a prior proceeding on a cross motion for summary judgment based on agreed facts provided by the parties in that proceeding and dealt with within the terms of the record made in that proceeding. I'm able to state to you with confidence that a factual determination made in case A based on a factual record made in case A does not determine, in my mind, the same factual question in case B, and that determination of the factual questions in this proceeding would be made by me on the basis of the factual record made by the parties and the evidence brought into this proceeding. Looking at the meaning of bias and prejudice, I briefly reviewed those terms in Black's law dictionary, and looking at first the definition of bias for a judge, as used in law regarding disqualification of a judge bias refers to a mental attitude or disposition of the judge toward a party to the litigation and not to any views that she may entertain regarding the subject matter involved. I believe that the motion here addresses solely a prior ruling on subject matter and does not allege any bias toward the party nor is there any bias toward this party. In the same manner looking at prejudice of a judge, that which disqualifies a judge is the condition of mind which sways judgment and renders the judge unable to exercise her function of impartiality in a particular case. It refers to mental attitude or disposition of the judge toward a party to the litigation and not to any views that she may entertain regarding the subject matter involved. Again, I believe the issue raised here was a subject matter determination based on the facts in a prior record and that there has not been any prejudice shown towards this party and that there is not any prejudice towards this party. U & I CAN will have the opportunity based on the facts in this record to prove a different result than was shown in an earlier proceeding, and I do not at this point have any prejudged idea of what the result in this proceeding will be. In denying your motion, Mr. Holcomb, I will point out to you that nothing in my reading of the rules precludes you from bringing the motion again with specific facts and authority to support your position if you wish to continue to pursue this position with more support at a later time. MR. HOLCOMB: With all due respect, Judge Schaer, I'm going to have to ask you to suspend this proceeding so we can petition the full Commission itself to have you disqualified. I don't feel you made at all a showing that your decision in the 960659 case will not influence you in this proceeding. In fact, there are motions filed to have that proceeding dismissed pending -- to be decided. I see this as an untenable situation for U & I to proceed. We cannot proceed in the face of this. This is vital to their continuing existence, and with all due respect, again, we have to have an administrative judge who will take a fresh look at this proceeding without having predecided the very issue that will be before this proceeding as between the same parties. And I would ask you to suspend the proceedings to allow us to petition the Commission for your disqualification. JUDGE SCHAER: Mr. Holcomb, I'm going to continue the pre-hearing conference this morning. I do not see any prejudice to your client of going forward with motions to intervene, going forward with scheduling this proceeding, looking at discovery issues, the kinds of matters that we would deal with at a pre-hearing conference. I will not rule on the motion that you have made regarding another proceeding in this docket number this morning because that might overlap into the area you're concerned about. I believe you would have full opportunity then to raise your motion without slowing down a continuation of this proceeding by getting those procedural matters dealt with this morning. MR. HOLCOMB: Again, with all -- JUDGE SCHAER: I have ruled already on the motion to disqualify. I have indicated to you that I have not prejudged any issue that will be brought in this proceeding, that you may make a factual record that you bring forward, and that any rulings I make in this proceeding will be based on that factual record and not based on the record in an earlier proceeding. If you wish to pursue that further you may do so, but I do not see any prejudice to your client from continuing with this pre-hearing conference this morning. MR. HOLCOMB: There are so many elements of discretion that are going to be coming up this morning, I can say that from my knowledge of this case, I fail to understand how you can proceed in this case even in the areas that you have indicated without discretionary -- a large element of discretion being entered in. I can cite a few examples, burden of proof on issues. I can cite evidentiary standards that are going to be applied. I can cite confidentiality of lists that are going to be involved in this proceeding, protective orders. I can cite to this court that a very large decision -- threshold decision is going to have to be made as to what this court -- what this board -- what this administrative judge can find in this proceeding in terms of registration or the lack of it. And we are going to have to have some guidance on that issue in order to proceed with the items and procedures that you've described this morning. I must respectfully request that you suspend these proceedings until we get a ruling from the full Commission as to whether you're going to be disqualified or not. JUDGE SCHAER: And that request has been denied. MR. HOLCOMB: I've got to state for the record, then, that we object to the continuation of this proceeding and all decisions made from and after this time on the grounds that we have timely brought forth a motion to disqualify. We have timely asked to suspend proceedings to allow that decision to be made by the Commission itself. You've denied all that. This Commission is -- this Commission can very well find, and we would ask them to find, that a fresh proceeding be instituted based on what we've asked, moved for and cited to the administrative law judge. At this date I think it would be an error for this administrative law judge to proceed in the face of this. JUDGE SCHAER: That's been noted. MR. HOLCOMB: It would work a great hardship especially on U & I CAN in terms of resources, limited funds, et cetera, to proceed. JUDGE SCHAER: That's been noted. Let's move on. MR. HOLCOMB: May I have a continuation objection then to the proceeding? JUDGE SCHAER: Yes, you may. The next order of business I would like to address is petitions and motions to intervene. I have received one written motion to intervene from U S WEST. Have all counsel received a copy of that motion? MR. O'CONNELL: I had not, Your Honor, but I had not participated in the motion. MR. BUTLER: Judge, Peter Butler for the record. I am handing a copy of the motion to intervene to Mr. O'Connell right now. I'll make sure he's delivered a copy of this motion if intervention is granted. JUDGE SCHAER: Mr. Butler, do you have anything to add to your petition? MR. BUTLER: Just briefly, Your Honor. I believe our petition is well grounded on the two scores indicated in the motion. First of all, we do have a direct stake in this proceeding insofar as we are proceeding against U & I CAN for access charges for services that we provided to them for which they did not pay; and the second, insofar as this proceeding is a classification proceeding U S WEST would be able to assist the Commission in providing evidence necessary to make that resolution, and we stand ready to do so if requested. JUDGE SCHAER: Is there any objection to U S WEST intervention in this proceeding? MR. HOLCOMB: On behalf of U & I CAN, yes. JUDGE SCHAER: On what grounds? MR. HOLCOMB: We fail to see what matters they can present before this proceeding that would in any way assist the administrative judge in making a decision whether U & I CAN should be registered. We would not object to U S WEST appearing for the limited purpose of responding to our motion to dismiss cause No. 960659, alternatively, to suspend 971515 for the purpose of responding to that motion. They were a party in that proceeding and they would have standing, I would think, for that limited purpose to respond to it. As to GTE, we would object entirely to their -- JUDGE SCHAER: We're not taking up that motion at this point, sir. Any other party wish to comment on U S WEST's motion to intervene? MS. SMITH: Staff is not opposed to U S WEST's motion to intervene and in fact supports that motion. We believe that U S WEST could in fact provide evidence to this tribunal to assist in the determination whether or not U & I CAN should be classified as a telecommunications company. JUDGE SCHAER: Any brief response, Mr. Butler? MR. BUTLER: Yes, just briefly, Your Honor. Regarding the fact that whether or not we are to be able to present evidence that would assist this tribunal is effectively a decision within the Commission's discretion. As for the other basis of the motion that Mr. Holcomb doesn't address is the fact that we do have a stake in the Commission's findings in this matter insofar as we are pursuing access charges that we intend to fully pursue against U & I CAN, and in that respect Mr. Holcomb didn't adequately respond to the basis of our motion, and we would submit that under the statute we are entitled to intervene in this proceeding. JUDGE SCHAER: I'm going to grant U S WEST's motion to intervene. Next item -- MR. HOLCOMB: I would except to that ruling. JUDGE SCHAER: Thank you. -- is the motion to intervene by GTE. Mr. O'Connell. MR. O'CONNELL: Thank you, Your Honor. Tim O'Connell on behalf of GTE Northwest, Incorporated. We respectfully move to intervene. The basis for our motion to intervene is twofold and similar to the U S WEST motion you just heard. U & I CAN operates in the traditional service area of GTE, and as such GTE has also an interest in the stake of the classification. As is known to this Commission, GTE has its own claims against U & I CAN in docket UT- 970257. Additionally, by virtue of U & I CAN's operation in GTE's traditional serving area, we will be able to offer evidence that will be of assistance to the Commission in resolving the question of the appropriate classification of U & I CAN. GTE will not broaden the issues in this proceeding, and requests leave to intervene as a party participant. JUDGE SCHAER: Is there any objection to the intervention of GTE Northwest, Inc.? MR. HOLCOMB: We would object, and on behalf of U & I CAN we would object as generally they have no information whatsoever that would be of assistance to the administrative judge in making a decision whether U & I CAN should register. They would not be a party to our motions so they would not even have standing to come in on a -- for a limited purpose. We would object to their appearance or their motion to intervene in this proceeding. JUDGE SCHAER: Any response from any other party? MS. SMITH: Commission staff does not object to the intervention of GTE and we support GTE's intervention in this matter. We believe that GTE does have information that would assist the tribunal in making a determination whether or not U & I CAN should be classified as a telecommunications company, and also because GTE does have a complaint against U & I CAN asking for access charges, its intervention in this case is entirely appropriate. MR. BUTLER: U S WEST reiterates the staff's position. JUDGE SCHAER: Any brief response, Mr. O'Connell? MR. O'CONNELL: Your Honor, I think staff and U S WEST have stated the claim very clearly. We believe we should be permitted to intervene. JUDGE SCHAER: I'm going to grant the intervention of GTE. MR. HOLCOMB: Judge Schaer, may we have a five minute recess? I have to confer with my client at this point. JUDGE SCHAER: All right. Let's be off the record and be back at 10:42, please. (Recess.) JUDGE SCHAER: Let's go back on record, and, I believe, Mr. Holcomb that you had something you wished to address at this point. MR. HOLCOMB: I had to seek a recess here to talk to my clients. I think about the court's rulings and so forth, what we're going to have to do, unfortunately, in this proceeding, is to go into Superior Court and get a writ of mandamus getting the Commission to disqualify you in this proceeding. I want to address my clients in the five minutes we had available here to the various alternatives and various problems with that, but this is untenable for us to proceed here. Both of those petitions to intervene should have been denied without more -- they have no interest in this proceeding whatsoever. We can see what the character and quality of this proceeding is going to be like down the line. I see no alternative now, since you have refused to disqualify yourself, since you refused to suspend this proceeding to grant us the right to go to the Commission to petition to have you disqualified, since this is vitally important to U & I CAN in their total operations and for the interest of this nonprofit corporation, this is an untenable proceeding for us to go into, we're going to have to go into Superior Court to get a motion for a writ of mandamus directing the Commission to disqualify you. I've explained to my clients that are here representing U & I CAN the delays that are inherent in that, the time that's inherent in that. They have authorized me to proceed, and so I really suggest to this administrative judge that you suspend proceedings and allow us to do that. Thank you. JUDGE SCHAER: Mr. Holcomb, I have already ruled, as you are aware, that you may, if you wish to bring your motion again, bring that motion with specific facts and with authority supporting your position -- MR. HOLCOMB: Then give us time to do that. JUDGE SCHAER: -- to the Commission at any time. MR. HOLCOMB: Then give us time to do that. JUDGE SCHAER: And I have also ruled that I am not going to suspend this pre-hearing conference, that we can proceed with scheduling and with other procedural matters so that the rest of this case is not unnecessarily postponed. Following on those other tracks give us the time to proceed here. MR. HOLCOMB: I had no idea that you were going to be the administrative -- JUDGE SCHAER: I have ruled on that, and that's all I'm going to say at this point. MR. HOLCOMB: You'll have to excuse us, I'm sorry. JUDGE SCHAER: I'm going to continue the pre-hearing conference. We will continue without you, sir, and you will obtain a copy of the order which will tell you the schedule that has been set for this proceeding. MR. HOLCOMB: You will have to excuse us, I'm sorry. JUDGE SCHAER: Good day. MR. HOLCOMB: I wish it would not come to this, I frankly do, but it's untenable for my clients. JUDGE SCHAER: The next thing that we're going to do in this pre-hearing conference is confirm that the individuals who are representing their clients are going to be the contacts for distribution in this matter, and so I would like to check with each of the parties that are remaining for the pre-hearing conference to confirm. Ms. Smith, are you going to be the contact for the staff? MS. SMITH: Yes, I am. JUDGE SCHAER: And you, Mr. Butler, will you be the contact person for U S WEST? MR. BUTLER: Yes, I am, Your Honor. JUDGE SCHAER: And you, Mr. O'Connell? MR. O'CONNELL: Yes, I can. JUDGE SCHAER: Thank you. The next I think I would like to do is get fax numbers for each of the contact persons so we have those available and if for some reason I need to contact you quickly. And again I will start with you, Ms. Smith. MS. SMITH: Fax number for me is area code 360-586-5522. JUDGE SCHAER: Thank you. And for you, Mr. Butler. MR. BUTLER: For U S WEST, Your Honor, area code 206-343-4040. JUDGE SCHAER: And for you, Mr. O'Connell. MR. O'CONNELL: Thank you, Your Honor. 425-258-9275. JUDGE SCHAER: Next thing on my list of items to be covered today is scheduling. Have the parties discussed scheduling amongst themselves at all? MS. SMITH: No, MR. O'CONNELL: We have not, Your Honor. JUDGE SCHAER: I'm going to suggest that we go off the record to discuss scheduling and that we include in that discussion some discussion of discovery and things of that nature so that we have some idea how those time lines are going to need to fit into the other time lines for the proceeding. I don't know if any party is going to want to trigger the discovery rule. That's one of the things that can be talked about. MS. SMITH: I think that's probably a good idea in this proceeding. Based on my understanding it's possible that the parties may seek to obtain from U & I CAN its membership list. U & I CAN might have a confidentiality issue with that membership list and so a protective order should be issued in this case. JUDGE SCHAER: So that you will want both the discovery rule triggered and a protective order; is that correct? MR. O'CONNELL: I think that would be appropriate, Your Honor. We have reason to think that U & I CAN will object to producing certain information about its membership. JUDGE SCHAER: We could deal with those two matters and then go off the record to discuss scheduling, if that would be appropriate. Is staff moving, then, for a protective order? MS. SMITH: Yes. JUDGE SCHAER: A protective order will be granted in this proceeding. MR. O'CONNELL: Your Honor, if I may. JUDGE SCHAER: Yes, Mr. O'Connell. MR. O'CONNELL: An issue, as counsel for staff and I addressed, we know to a high level of certainty is going to come up is the issue about the confidentiality for virtually anything relating to U & I CAN's membership. I raise that issue only because that being a somewhat unusual issue it is not explicitly addressed in the Commission's standard protective order, and so I was going to request that a provision in the order explicitly addressing that issue would be of substantial help to the parties. JUDGE SCHAER: Following the rule that the person who talks first gets to write -- MR. O'CONNELL: I can draft something up. JUDGE SCHAER: I'm going to ask you to consult with the other counsel and come up with what you would recommend as a sentence to be added, and I can get a copy of our form protective order so that we can look at where that should be inserted, and then we will go ahead and read that language into the record and include it in the form protective order. MR. O'CONNELL: We can probably do that when we go off the record. JUDGE SCHAER: Certainly. And then my understanding that staff is also going to seek to trigger the provisions of WAC 480-09-480 in the discovery rule. MS. SMITH: Yes. JUDGE SCHAER: I will again grant that motion and trigger the discovery rule in this matter. So let's go off the record and have a discussion of what kind of schedule that we'll need to put together for this proceeding. I think I will let the parties start talking amongst themselves, and I will go get a copy of the form protective order and come back and find out that you've got everything done and we're ready to wrap this up. We're off the record. (Recess.) JUDGE SCHAER: Let's be back on the record. While we were off the record the parties discussed scheduling in this matter and discovery and protective order, and before the break I had granted a motion by the Commission staff for protective order. We had not discussed the specific language of that order, and I believe that the parties have discussed making an addition to the form pr