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SmartEnergy Files Amended Motion To Modify Remedy Portion Of Order Citing Recent Supreme Court Decision
From Motion:
SmartEnergy Holdings, LLC, d/b/a SmartEnergy (“SmartEnergy”), pursuant to Sections 3-113(b) and 3-114 of the Public Utilities Article (“PUA”) and COMAR 20.07.02.08D, requests that the Maryland Public Service Commission (“Commission”) modify Order No. 89795 (the “Order”) to include the maximum refund and civil penalty dollars that SmartEnergy is able to pay based on an objective analysis of its financial position. [ *** ] SmartEnergy’s financial information – all of which was provided to the Staff of the Commission (“Staff”) and the Office of People’s Counsel (“OPC”) in June 2024 – objectively supports a maximum payment by SmartEnergy of $3 million, which includes the current $2.5 million appeal bond which SmartEnergy backed with cash; the current $250,000 financial integrity bond; and $250,000 cash from SmartEnergy.
[ *** ] SmartEnergy respectfully notes that the currently proposed remedy and potential civil penalties are punitive to SmartEnergy. As recently recognized by the United States Supreme Court in Jarkesy, decided just weeks ago at the end of its most recent term, punitive penalties and causes of action which approximate common law fraud each support a defendant’s right to a jury trial. SmartEnergy is entitled to a jury trial if the Commission intends to levy punitive monetary penalties against it for allegedly fraudulent conduct.
SmartEnergy’s proposal to limit penalties to a maximum payment is in the public interest. Among other things, a $3 million payment would enable SmartEnergy to avoid being placed in a precarious financial situation that might limit the company’s ability to make any payments, afford customers the certainty of receiving more money than they might otherwise receive, and bring an end to this proceeding after more than five years of litigation. Also, the Commission could ensure that the entirety of the payment is made to allegedly harmed consumers, and such a payment would be almost five and a half times larger than any prior payment received by the Commission or customers from a supplier and it would also be higher than what customers would receive were SmartEnergy were forced to consider its options as a direct result of an Order mandating that SmartEnergy pay full refunds to all of its prior Maryland customers. [ *** ]
The Commission’s ultimate decision purported to levy a civil penalty, to be paid to the Commission, of undetermined value. That penalty was left to be determined only after SmartEnergy had made massive payments to consumers and was levied without any final adjudication by a jury of the facts alleged by the Commission without an independent jury reaching a neutral adjudication. [ *** ]
[ *** ] The Commission’s failure to provide SmartEnergy with a jury trial when preparing to levy a punitive penalty or fine of the type historically brought under the common law violated SmartEnergy’s right to a trial by jury under the Constitution of Maryland. [ *** ]
The Supreme Court of the United States held, less than 70 days ago, that “it is well established that common law claims must be heard by a jury.” Sec. & Exch. Comm’n v. Jarkesy, 144 S. Ct. 2117, 2127 (2024). In Jarkesy, the Supreme Court analyzed the jury trial right in the context of a fine applied within an administrative court. As in that case, it is clear that the Commission’s intent to levy a civil penalty to punish SmartEnergy replicates claims and remedies for common law fraud, and thus must be heard by a jury. And as noted in Jarkesy, the legislature cannot abrogate the right to a trial and accord unchecked enforcement authority to itself “by mandating that traditional legal claims be taken to an administrative tribunal.” Jarkesy, 144 S. Ct. at 2120 (citing Granfinanciera, 492 U.S. at 52). 20. To the extent the Commission intends to levy punitive financial penalties against SmartEnergy to punish it for purported fraudulent, misleading, or deceptive practices, the Commission’s decision to levy such a penalty violates SmartEnergy’s constitutional right to a trial by a jury. [ *** ]
SmartEnergy Motion (ML# 312054) (09/03/2024)
9613 (05/10/2019)
(In The Matter Of The Complaint Of The Staff Of The Public Service Commission Against SmartEnergy Holdings,LLC D/B/A SmartEnergy)
