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Tuesday, January 7, 2014

In the Matter of the Complaint of Buckeye Energy Brokers, Inc. v. Palmer Energy Company, Case no. 2012-0668
Public Utilities Commission of Ohio

Randall L. Bonnell Jr. v. State of Ohio, Case no. 2013-0167
Fifth District Court of Appeals (Delaware County)

State of Ohio v. James D. Black, Case nos. 2013-0552 and 2013-0805
Fifth District Court of Appeals (Ashland County)

Disciplinary Counsel v. Stephen L. Becker, Case no. 2013-1257
Franklin County


Is Palmer Energy Company a Natural Gas and Electricity Broker Required to Be Certified by the PUCO?

In the Matter of the Complaint of Buckeye Energy Brokers, Inc. v. Palmer Energy Company, Case no. 2012-0668
Public Utilities Commission of Ohio

ISSUES:

BACKGROUND:
Buckeye Energy Brokers is certified by the PUCO as a broker providing services in the natural gas and electricity industries. Palmer Energy Company holds itself out as an energy consultant providing advice and services to local governments and other clients on natural gas and electricity services. In May 2010, Buckeye filed a complaint with the PUCO against Palmer alleging that Palmer had violated the law because it was providing retail natural gas services and competitive retail electric services, but it was not certified to do so as required by law.

The PUCO ruled in November 2011 that Buckeye had not proven that Palmer was providing those gas and electric services without proper PUCO certification. Buckeye applied for a rehearing by the PUCO, which denied the request. Buckeye then exercised its right to have the Ohio Supreme Court review the PUCO’s decision.

The statute governing natural gas certification states that no “retail natural gas supplier” shall provide a competitive retail natural gas service without first being certified by the PUCO. A “retail natural gas supplier” is one that is “engaged … in the business of supplying or arranging for the supply of a competitive natural gas service” and includes marketers, brokers, and aggregators.

Buckeye asserts that Palmer arranges for the supply of competitive natural gas service and is a broker. Buckeye claims that Palmer’s services include providing information for and assisting communities with templates for becoming certified natural gas aggregators; preparing documents and requests for proposals; analyzing bids from natural gas suppliers and making recommendations; reviewing and negotiating contracts; preparing or assisting with reports; collecting and analyzing information on cost savings; and other activities.

In addition, Buckeye contends that Palmer represents itself as a broker – on its letterhead, on its web site, and to potential clients. In addition, they note that Palmer obtained certification to provide natural gas service as a broker from the PUCO in September 2010 – a fact that Buckeye claims demonstrates that Palmer had been providing broker services for years before that.

The statute governing electricity certification mirrors the natural gas certification law. It also states that a company arranging for the supply of competitive retail electric service must be certified by the PUCO. Buckeye details a list of electricity services provided by Palmer similar to the ones it provides to the natural gas industry and argues that Palmer also acted as broker in the electricity industry for years before it was certified to do so in September 2010.

Buckeye contends that Palmer competed against it and other certified companies to provide these natural gas and electric services. This activity also shows that Palmer was acting as a broker, Buckeye argues.

Before it became certified as a broker, Palmer’s services were more than “mere” consulting, Buckeye maintains. Consulting does not require certification by the PUCO and is not defined in the statutes.

“It is overwhelmingly clear that Palmer did much more than simply provide professional or expert advice during the precertification period. Palmer actually did things for its clients,” they wrote in their brief to the court. “Palmer did not merely tell its clients what they should do. Palmer performed a whole host of activities and services on behalf of its customers during the precertification period. Palmer took numerous actions and provided numerous services to its customers ….”

The PUCO responds that Buckeye did not prove that Palmer arranged for the supply of natural gas or electricity. To show that Palmer had arranged for the supply of these services, Buckeye needed to demonstrate that Palmer “made the ultimate decisions with regard to the supply of natural gas or electricity on behalf of its clients” or “entered into contractual obligations on behalf of its clients regarding the provision [of] natural gas or electric supplies,” the PUCO states.

The PUCO contends that Palmer always acted in conjunction with a certified service provider when advising local governments or customers, and the consultants never made independent decisions. Two of Palmer’s clients testified that Palmer only advised them on energy matters, the PUCO notes.

The commission adds that a company that performs competitive retail natural gas or electric services must be certified even if they call themselves consultants. In this case, however, the PUCO ruled that Palmer was not providing such services.

The PUCO argues that Buckeye has not shown the required prejudicial harm to succeed in its appeal and, regardless, its appeal is irrelevant because Palmer has now been certified in both industries. The commission asserts that Buckeye’s request that the court reweigh the evidence in this case is inappropriate and contrary to precedent.

Palmer filed a brief in the case as an intervening interested party and notes that it eventually sought certification in 2010 because it may want to expand its role beyond consulting in the future. However, the company maintains it has not yet used that certification in its business.

The many services Palmer offers do not convert it from consultants into competitive retail electric or natural gas suppliers, they contend.

“[T]he Commission did not use the actions or definition of a consultant as the key reference point in making its decision,” Palmer wrote in its brief. “If the activities performed rose to the level of engaging in the ultimate decision making process and entering into contractual obligations on behalf of its clients, then the Commission could find that the entity was providing a competitive service. In this case, the Commission … found that the activities performed by Palmer Energy to be in the role of an advisor assisting its clients and not as a provider of or an arranger for a competitive service.”

On the issue of how Palmer represented itself in places such as its website, Palmer maintains that those representations were a carryover from the 1980s when it first opened as a brokerage. However, when the new president took over, the company transitioned away from a brokerage to energy consulting, Palmer argues. They said the commission also found that these examples were circumstantial and Buckeye did not show that Palmer had actually been providing these services.

Buckeye also contends that it was improper for the PUCO to find that it had not provided enough evidence to prove its case given that the PUCO “thwarted” Buckeye from obtaining and presenting evidence at trial.

The PUCO counters that Buckeye had many legal options along the way to compel the release of additional documents during discovery. However, the commission asserts that Buckeye asked for the documents after the deadline had passed following nine months of discovery. The PUCO argues that ample discovery time was provided, and the court should not step into the discovery dispute.

Palmer adds that the subpoena was overbroad and that the information Buckeye sought was confidential and proprietary, so it had a contractual obligation not to release the documents anyway.

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Contacts
Representing Buckeye Energy Brokers, Inc.: Matthew Yackshaw, 330.455.0173

Representing Public Utilities Commission of Ohio: Thomas McNamee, 614.466.4396

Representing Palmer Energy Company, an intervening appellee: M. Howard Petricoff, 614.464.5414

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What is Required by Trial Courts When Issuing Consecutive Sentences in a Criminal Case?

Randall L. Bonnell Jr. v. State of Ohio, Case no. 2013-0167
Fifth District Court of Appeals (Delaware County)

ISSUE: When imposing consecutive sentences, does Ohio’s criminal sentencing law require a trial court to make factual findings, give reasons supporting its findings at sentencing, and include the findings in its judgment order?

BACKGROUND:
Randall L. Bonnell Jr. and an accomplice stole money from vending machines at the Delaware Best Western on three separate occasions. They also attempted to steal cash from another hotel vending machine, but fled when they flooded the vending area after breaking a water line connected to the soda machine. They stole a total of $117.

In December 2011, Bonnell pled guilty to one count of tampering with a vending machine and three counts of burglary. Bonnell had been arrested and imprisoned multiple times during his adult life. At sentencing, he said he had a drug addiction that led to his repeated thefts, and he was now attending drug and alcohol addiction meetings. Noting his lengthy record, however, the court sentenced Bonnell to 11 months in prison for the tampering conviction and 30 months for each of the burglary charges. The court ordered that the sentences be served consecutively, for a total prison term of 8 years, 5 months.

Bonnell appealed to the Fifth District Court of Appeals, arguing that imposing his sentences consecutively did not conform to the requirements of an Ohio sentencing statute, R.C. 2929.14 (C)(4). The Fifth District, however, found that the requirements were met, and it affirmed the trial court’s sentence.

Bonnell appealed to the Ohio Supreme Court, which agreed to hear his case.

In their briefs to the court, both sides highlight the legislative and judicial history of Ohio’s consecutive sentencing law. In 1996, the Ohio General Assembly passed a law that, in part, required definite sentences in criminal cases. However, in 2006, the Ohio Supreme Court determined that the criminal statutes requiring defined sentences were unconstitutional, based on cases decided by the U.S. Supreme Court.

Another U.S. Supreme Court case led to a subsequent 2010 Ohio Supreme Court decision (State v. Hodges), which held that the legislature could choose to enact laws requiring courts to make factual findings before issuing consecutive sentences. The Ohio legislature responded by enacting H.B. 86. Part of the new law did require courts to make factual findings before imposing consecutive sentences.

Bonnell’s attorneys assert that a trial court must engage in fact-finding to determine whether a consecutive sentence is warranted. The court must then state those findings and the reasons for its sentence at the sentencing hearing and in its sentencing documentation, they contend.

They note that Ohio law establishes that the purposes of felony sentencing are to protect the public from future crime, and to punish the offender at the minimum level that protects the public while not placing a burden on state and local resources.

The Fifth District’s comments about Bonnell’s criminal record and the fact that there was a presentence investigation report did not meet the court’s legal requirements for issuing his sentences consecutively, Bonnell’s attorneys argue. In addition, they claim that the trial court must not have considered whether consecutive sentences were proportionate to the seriousness of Bonnell’s crimes and the danger he is to the public.

“[I]t is difficult to imagine that analysis took place because Mr. Bonnell is serving the better part of a decade in prison for the nonviolent property crime of stealing change from vending machines,” they wrote in their brief.

They also maintain that an Ohio criminal procedure rule on sentencing states that courts must explain their statutory findings and reasons for a sentence during sentencing. At a minimum, courts are required to make their findings concrete somewhere, they conclude.

Attorneys for the Delaware County Prosecutor’s Office respond that while H.B. 86 did mandate that courts make factual findings to issue consecutive sentences, it did not require that courts provide reasons for their findings. The Delaware County attorneys counter that the legislation actually deleted an earlier requirement that courts state their underlying reasons for their findings.

They also argue that the criminal rule cited by Bonnell’s attorneys is actually in conflict with R.C. 2929.14 (C)(4), the sentencing statute at issue in this case. This conflict involves an offender’s liberty and basic fundamental rights related to a prison sentence, so they contend that the conflict is substantive. Statutes control over rules in matters of substantive law, they assert, so in this case trial courts do not need to state their reasons for consecutive sentences.

In addition, they maintain that the court did complete the fact-finding required by law. The trial court pointed out Bonnell’s prior incarcerations, his “atrocious” criminal record, a lack of respect for the “rules of society,” and the presentence investigation report – all of which satisfied the required factual findings, the prosecutors state. No statewide framework requiring “specific, magic words” and “specific, statutory language” for consecutive sentences is needed, they conclude.

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Contacts
Representing Randall L. Bonnell: Francisco Luttecke, 614.644.1551

Representing the State of Ohio from the Delaware County Prosecutor’s Office: Eric Penkal, 740.833.2690

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Does the Law Governing Interstate Detention Orders Apply to People Serving Sentences in County Jails?

State of Ohio v. James D. Black, Case nos. 2013-0552 and 2013-0805
Fifth District Court of Appeals (Ashland County)

ISSUE: Does the phrase “penal or correctional institution of a party state” in the Interstate Agreement on Detainers (R.C. 2963.30) include county jails?

Editor’s note: The Supreme Court determined that a conflict exists between the Fifth and Eighth District Courts of Appeals on this issue. The court also accepted an appeal from the State of Ohio and consolidated the two cases for oral argument.

BACKGROUND:
In March 2011, while serving a 12-month sentence in the Cecil County Detention Center in Maryland, James Black asked for disposition of charges against him in three Ohio counties – Ashland, Franklin, and Richmond. He made this request based on a law known as the Interstate Agreement on Detainers (IAD), which provides cooperative legal procedures across 48 states, the District of Columbia, and Puerto Rico to “encourage the expeditious and orderly disposition of [outstanding] charges and determination of the proper status of any and all detainers based on untried indictments, informations or complaints.”

Black was transferred from Maryland to Richland County in May 2011, and the charges in that county were resolved in mid-July. Earlier in July, Ashland County had Black transferred there for an arraignment hearing on its charges against him. Black was then returned to Richland County and sent back to Maryland on August 1, 2011.

According to Black’s attorneys, the detainer still pending in Ashland County prevented the possibility of his parole in Maryland in August 2011 and made him ineligible for community work or rehabilitation for his addiction and mental health issues.

Black was released from the Maryland detention center in September 2011. He did not appear for his trial in Ashland County in December 2011, and the trial court issued a warrant for his arrest. When later arrested in Medina County, Black was transferred to Ashland County to face the charges against him there.

Black filed a motion to dismiss the charges against him in Ashland County, arguing that the court had violated the time limits in the interstate agreement. The trial court denied his motion because it determined that the interstate agreement did not apply to his case given that he was held in a county detention facility in Maryland. The law applies only to individuals incarcerated in state penal or correctional institutions, the court ruled.

Following a jury trial in March 2012, Black was found guilty of theft, and breaking and entering. The court sentenced him to a year in prison.

Black appealed to the Fifth District Court of Appeals, which reversed the lower court and determined that the interstate agreement did apply to him. The appellate court ruled that the interstate agreement applies to offenders held in county jails as well as in state penal or correctional facilities, and it returned the case to the trial court.

The state appealed to the Supreme Court, which agreed to hear the case. The court also certified a conflict between the Fifth District and the Eighth District on the issue and consolidated the cases for oral argument.

At issue in this case is the meaning of the phrase “a penal or correctional institution of a party state” as used in the interstate agreement.

Attorneys for the state argue that the language in the law applies to inmates of party-state prison systems, not county jail inmates. They note that Ohio jails are run by the counties and Ohio prisons are operated by the state. They contend that the interstate agreement “applies to persons serving terms of imprisonment in a facilit[y] of a ‘party-state’ not every facility operated by any political subdivision.”

The case in conflict with this Fifth District decision is State v. Wyer from the Eighth District. The state’s attorneys maintain that the Wyer court ruled an offender’s prison time must be served in a state penal or correctional institution for the provisions of the interstate agreement to apply to him or her. The Eighth District also held, the state says, that had the Ohio legislature intended the law to apply to all correctional facilities, it would have explicitly stated that in the statute.

The Fifth District relied on a 1990 Arizona case (Escalanti v. Superior Court) in its decision. While the state’s attorneys concede that Escalanti supports Black’s position, they note that other states, such as Indiana and Nevada, have ruled the opposite – that the interstate agreement does not apply to county jail inmates.

The state’s attorneys maintain that they understand that the interstate agreement’s goals of removing barriers to prisoner treatment and disposing of charges expeditiously must be considered in interpreting the statute, but they counter:

[T]his does not mean that state and county considerations in orderly disposition of charges and even transportation of inmates is irrelevant. Transporting defendants to or from other states places a burden on counties in the State of Ohio. The Fifth District has expanded the amount of persons subject to transfer under the IAD from just inmates of party-state prison systems under State v. Wyer to all county jails in all party-states. Now a person in a county jail in Ohio can request transfer for disposition in a party-state across the country, and similarly persons in out-of-state county jails can request transfer to Ohio for disposition. This increase in the amount of defendants subject to transfer has the potential to burden counties, particularly smaller counties.

Attorneys for Black contend that “the overwhelming weight of authority” shows that the interstate agreement applies to any person after he or she is sentenced and incarcerated, “regardless of the name on the building where he or she is imprisoned.”

This argument aligns with the holding of the Escalanti court, Black’s attorneys assert, which stated that the interstate agreement’s intent was to benefit all prisoners who could participate in rehabilitation programs if not for the presence of out-of-state detainers. They also note that the Arizona court determined that the Nevada decision, cited by the state’s attorneys, was not applicable because county jails there offer no rehabilitation, which is part of the purpose of the interstate agreement. The Escalanti court also held that the court’s analysis in the Indiana case cited by the state’s attorneys was faulty, they state.

Black’s attorneys also note that Maryland has expressly defined “correctional institution” in its version of the interstate agreement to encompass state or local correctional facilities. While pointing out that Ohio’s law has no definition of “penal or correctional institution of a party state,” they argue that “any ambiguity must be construed in favor of the remedial purpose of this statute. In other words, the statute’s silence on any limitations of its applicability only to state-operated prisons or only to county-owned jails means that this ‘ambiguity’ should be construed as meaning the statute applies to all ‘penal or correctional institutions’ where a prisoner is serving a ‘term of imprisonment.’”

They also argue that the decision in Wyer runs contrary to the statute’s intent.

As far as the argument whether the language is referring to facilities that are state-operated, Black’s attorneys contend:

The statute uses the word ‘state’ in its lower case form, which we take to mean the use of the word in a general, undefined sense. The statute does not use the upper-case ‘State’, which would suggest the term means the State as a political entity, as when we use the term ‘State of Ohio’. We take the phrase … ‘entered upon a term of imprisonment in a penal or correctional institution of a party state’ not to be a reference to institutions ‘of the State’ but institutions ‘of a party state’ as opposed to institutions of non-partystates, i.e., institutions in states that are not party to this interstate compact. This pattern statute was not attempting to limit its benefits to prisoners hoping for rehabilitation in State institutions but was simply saying its benefits did not apply to prisoners in jails in states who had not also enacted the IAD.

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket (2013-0552 and 2013-0805).

Contacts
Representing the State of Ohio from the Ashland County Prosecutor’s Office: Emily Bates, 419.289.8857

Representing James D. Black: Daniel Mason, 440.759.1720

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Attorney Discipline

Disciplinary Counsel v. Stephen L. Becker, Case no. 2013-1257
Franklin County

The Board of Commissioners on Grievances & Discipline has recommended that Columbus attorney Stephen L. Becker be disbarred from the practice of law in Ohio for misappropriating hundreds of thousands of dollars, mostly to support a gambling addiction. The board noted that much of Becker’s misconduct occurred while he served as guardian for his developmentally disabled nephew and as power of attorney for his elderly aunt.

As guardian over funds his nephew received in the settlement of a personal injury lawsuit, the board found that Becker made more than $60,000 in loans to his secretary and her husband for a mortgage and nearly $31,000 in a loan to his daughter for a mortgage. In addition, he took about $32,000 for himself to pay a gambling debt and substantially delayed distribution of the account’s funds to his nephew’s father after the family moved out of state, the board determined.

In 2005, Becker opened a joint bank account as power of attorney for his aunt, whom he helped to care for. The board’s panel reviewing the matter found that about three-quarters of the amount of money debited from the account between 2005 and 2008, when his aunt died, were checks made out to casinos. The panel concluded that Becker depleted funds from his aunt’s investment and savings accounts to the joint account and then spent those funds for himself.

Becker’s aunt had designated three people, including Becker, as beneficiaries of her estate upon her death. As executor of the estate, Becker paid himself a distribution from the estate within days after her death, but did not pay the other beneficiaries until nearly two years later.

In several non-family client matters, Becker did not make agreed-upon payments to the Lima law firm where he was employed and did not deposit funds into the firm’s lawyer trust account. The board determined, however, that Becker’s failure to pay the law firm the agreed-upon percentages of legal fees did not rise to the level of a disciplinary violation.

In its report, the board noted that Becker’s gambling addiction does not qualify as a mitigating factor under disciplinary rules because he has not completed a sustained period of successful treatment and he has not received a prognosis from a qualified health care professional that he will at some point be capable of returning to the competent, ethical practice of law. To ensure the protection of the public, the board concluded that disbarment is warranted.

The Office of Disciplinary Counsel, which prosecuted the complaint against Becker before the board, has submitted one objection to the disciplinary board’s report. The Disciplinary Counsel contends that Becker’s concealment of fees from his firm constituted theft, so he should be found to have violated the related attorney discipline rules as well.

Becker has also filed objections to the board’s report. He argues that he has made restitution to his relatives and his former law firm in these matters. He also asserts that the investment of guardianship funds in mortgages was permitted by law at that time, that he reported the investment to the probate court, that he has taken steps to control his gambling addiction and has not gambled in almost three years, and that he self-reported his conduct. He asks for a suspension with conditions for reinstatement.

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Contacts
The Office of Disciplinary Counsel, 614.461.0256

Representing Stephen L. Becker: Robert Leonard, 419.228.1020

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These informal previews are prepared by the Supreme Court's Office of Public Information to provide the news media and other interested persons with a brief overview of the legal issues and arguments advanced by the parties in upcoming cases scheduled for oral argument. The previews are not part of the case record, and are not considered by the Court during its deliberations.

Parties interested in receiving additional information are encouraged to review the case file available in the Supreme Court Clerk's Office (614.387.9530), or to contact counsel of record.