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IN THE COURT OF COMMON PLEAS
DELAWARE COUNTY, OHIO
SUBURBAN NATURAL GAS COMPANY, CASE NO. 17-CVH-100585
Plaintiff, JUDGE EVERETT H. KRUEGER
MOTION OF DEFENDANT
COLUMBIA GAS OF OHIO, INC,
FOR ATTORNEY FEES PURSUANT
TO RC, 2323.51
COLUMBIA GAS OF OHIO, INC.,
Defendant.
Pursuant to R.C. 2323.51, Defendant Columbia Gas of Ohio, Inc. (“Columbia Gas”)
moves this Court for an Order awarding Columbia Gas its attorney fees in this action from
Plaintiff Suburban Natural Gas Company (“Suburban”). Suburban’s Complaint against
Columbia Gas in this case was frivolous and unwarranted under existing Ohio law because this
Court lacks subject matter jurisdiction over Suburban’s claims, a fact which Suburban at all
times knew to be true.
Accordingly, based upon the foregoing and for the reasons more fully set forth in the
attached Memorandum in Support, Columbia Gas respectfully requests that this Court, after
conducting a hearing pursuant to R.C. 2323.51(B)(2)(a)-(c), enter an Order awarding Columbia
Gas its attorney fees in the amount of $87,436.50 from Suburban pursuant to R.C. 2323.51 as a
result of Suburban’s frivolous conduct in this action.
Soammon Blase Geurk
Dslawars Connty, Ohio
General Division
£7244600:4 }
Bed:
03/07/2018 03:04 PM{7244600:4 }
Respectfully submitted,
s/ Matthew R. Rechner
MATTHEW R. RECHNER (0074446)
ADAM C. SMITH (0087720)
McDonald Hopkins LLC
600 Superior Avenue East, Suite 2100
Cleveland, Ohio 44114-2653
Telephone: — (216) 348-5400
Facsimile: (216) 348-5474
Email: mrechner@medonaldhopkins.com
acsmith @medonaldhopking.com
ANTHONY M. HEALD (0002095)
Heald Law
125 North Sandusky Street
Delaware, Ohio 43015
Telephone: — (740) 363-1369
Facsimile: (740) 369-1616
Email: tonyheatd @heald-law.com
Counsel for Defendant Columbia Gas of Ohio, Inc.MEMORANDUM IN SUPPORT
This lawsuit never should have been filed by Suburban, plain and simple. The Delaware
County Court of Common Pleas lacks subject matter jurisdiction over Suburban’s claims against
Columbia Gas, and more importantly, Suburban knew it. This type of frivolous conduct by
Suburban warrants an award of Columbia Gas’ attorney fees pursuant to R.C. 2323.51.
Columbia Gas respectfully requests that this Court hold a hearing pursuant to R.C.
2323.51(B)(2)(a)-(c) and thereafter award Columbia Gas its attorney fees in the amount of
$87,436.50 from Suburban. This amount represents Columbia Gas’ attorney fees incurred in this
action through February 8, 2018, the date of receipt of this Court’s February 5, 2018 Judgment
Entry dismissing Suburban’s Complaint for lack of subject matter jurisdiction.
I FACTS
The background facts of this case are detailed in Columbia Gas’ Motion to Dismiss For
Lack of Subject Matter Jurisdiction (the “Motion to Dismiss”), filed on November 2, 2017, and
its corresponding Reply Brief (the “Reply Brief”), filed on December 8, 2017, both of which
Columbia Gas incorporates herein by reference. Nevertheless, a brief recitation of such facts is
worthwhile here.
Suburban’s Complaint in this case centered upon a November 9, 1995 Stipulation
between Suburban and Columbia Gas that was adopted and approved by the Public Utilities
Commission of Ohio (the “PUCO”) and incorporated into a January 18, 1996 PUCO Order. See
Complaint. The Stipulation and PUCO Order contain the following term: “The Commission
shall_retain_ continuing jurisdiction_in_this_matter_to_supervise_and_assure the Parties’
L For ease of reference, Columbia Gas also incorporates and utilizes the same defined terms contained in its
Motion to Dismiss and Reply Brief.
{7244600:4 } 3compliance with this Joint Stipulation and Recommendation of the Parties.” See
Stipulation, Section C, 5 (emphasis added); see also PUCO Order, p. 62
Notwithstanding such clear and unambiguous language, Suburban filed its Complaint
against Columbia Gas on October 4, 2017 in the Delaware County Court of Common Pleas, not
with the PUCO. On October 13, 2017, Columbia Gas sent Suburban a four-page letter detailing
why this Court lacks subject matter jurisdiction over Suburban’s claims under Ohio law,
including relevant Ohio Revised Code sections and Supreme Court of Ohio precedent, such as
Allstate Ins. Co. v. Cleveland Elec. Illum. Co., 119 Ohio St.3d 301 (2008). A copy of Columbia
Gas’ October 13, 2017 Letter is attached hereto as Exhibit A? Columbia Gas therefore
requested that Suburban voluntarily dismiss its Complaint without prejudice and advised
Suburban that Columbia Gas would seek to recover its attorney fees if it were forced to obtain a
court-ordered dismissal of Suburban’s Complaint. See id. On October 16, 2017, Suburban
responded to Columbia Gas with the following four-sentence email:
We have your letter threatening to pursue sanctions if Suburban
Natural Gas Co. does not dismiss the referenced case. As one of
the lawyers who litigated several of the cases you cite, you may
test assured that we carefully considered the jurisdictional issue
before filing the complaint. If you wish to file a motion to dismiss,
that is your prerogative. We do not believe it would productive to
debate the jurisdictional issue with you via letter or email.
A copy of Suburban’s October 16, 2017 Email is attached hereto as Exhibit B4
The frivolousness of Suburban’s conduct in this case, however, is exemplified by
Suburban’s own admissions and filings before the PUCO. As set forth in Columbia Gas’ Motion
2 A copy of the PUCO Order, which incorporates the Stipulation as an exhibit thereto, is attached as Exhibit
Ato Columbia Gas’ Motion to Dismiss.
3 Columbia Gas’ October 13, 2017 Letter also is attached as Exhibit C to Columbia Gas’ Motion to Dismiss.
4 Suburban’s October 16, 2017 Email also is attached as Exhibit D to Columbia Gas’ Motion to Dismiss.
{7244600:4 } 4to Dismiss and Reply Brief, Suburban on_at least three separate occasions expressly relied
upon and invoked the PUCO’s jurisdiction over the Stipulation and PUCO Order in PUCO
proceedings initiated by Suburban against Columbia Gas. See Suburban’s 2007 Motion to
Enforce, filed in PUCO Case No. 93-1569-GA-SLF; Suburban’s 2013 Motion to Enforce, filed
in PUCO Case No. 13-1216-GA-UNC; and Suburban’s PUCO Complaint, filed in PUCO Case
No. 17-2168-GA-CSS.° In these PUCO proceedings, like in this action, Suburban alleged that
Columbia Gas purportedly violated the Stipulation and PUCO Order and requested the PUCO —
not a court of common pleas — to enforce the Stipulation and PUCO Order against Columbia
Gas. In fact, in one of those PUCO proceedings, Suburban sought to enforce the exact same
Stipulation terms (i.e., Section A, Paragraph 10) at issue in Suburban’s Complaint in this case.
See Suburban’s 2013 Motion to Enforce. Similarly, Count 1 of Suburban’s PUCO Complaint,
which was filed sixteen (16) days after the filing of Suburban’s Complaint in this case, is
expressly captioned: “Violation of the 1995 Stipulation.” See Suburban’s PUCO Complaint.
More importantly, Suburban repeatedly admitted in these PUCO proceedings that the
PUCO — not a court of common pleas — has subject matter jurisdiction over its claims against
Columbia Gas concerning the Stipulation and PUCO Order:
* The 2007 Motion to Enforce is filed “pursuant to Section C, Paragraph 5 of the
Stipulation] filed and approved in the above-docketed proceedings [Case Nos. 93-
1569-GA-SLF, et al.] on November 9, 1995 and January 18, 1996, respectively * *
*” (Suburban’s 2007 Motion to Enforce, p. 1) (emphasis added).
e« ** * Suburban has no alternative but to seek enforcement of the Stipulation filed and
approved in this case over which the Commission specifically retained continuing
jurisdiction. (Suburban’s 2007 Motion to Enforce, p. 10) (emphasis added).
« Columbia [Gas] is violating the Stipulation approved in these proceedings on January
18, 1996. The Commission retained continuing jurisdiction in these proceedings
5 Suburban’s PUCO Complaint, 2007 Motion to Enforce, and 2013 Motion to Enforce are attached as
Exhibits E-G, respectively, to Columbia Gas’ Motion to Dismiss.
{7244600:4 } 5to ensure the parties’ compliance with the Stipulation (see Section C, Paragraph
5_of the Stipulation). Accordingly, the Commission should reopen these
proceedings, hold such hearings as it deems necessary, and grant the relief requested
herein. In the alternative, Suburban respectfully requests that its motion and
supporting memorandum be treated as a complaint pursuant to Section 4905.26 of the
Ohio Revised Code and that proceedings be held in accordance with that section.
(Suburban’s 2007 Motion to Enforce, p. 11) (emphasis added).
The 2013 Motion to Enforce is filed “Lujnder § C, 5 of the [Stipulation] filed and
adopted in the above-docketed proceedings [Case Nos. 93-1569-GA-SLF, et al.] on
November 9, 1995 and January 18, 1996, respectively * * *.” (Suburban’s 2013
Motion to Enforce, p. 1) (emphasis added).
Columbia [Gas] is violating the Stipulation adopted by the Commission in its Finding
and Order. The Commission retained continuing jurisdiction _in_ these
proceedings to_ensure_the parties’ compliance with the Stipulation_and_the
Findings and Order adopting it. See § C, 15 of the Stipulation, Accordingly, the
Commission should reopen these proceedings, hold such hearings as it deems
necessary, and grant the relief requested herein. In the alternative, Suburban
respectfully requests that its motion and supporting memorandum be treated as a
complaint pursuant to O.R.C. § 4905.26 and that proceedings be held in accordance
with that section. (Suburban’s 2013 Motion to Enforce, p. 6) (emphasis added).
The Commission has personal jurisdiction over Columbia and subject matter
jurisdiction to hear and decide this action under R.C. 4905.04, 4905.05, 4905.06,
4905.26, and 4929.08. (Suburban’s PUCO Complaint, p. 2) (emphasis added).
In_its Finding and Order adopting the 1995 Stipulation, the Commission
expressly_reserved jurisdiction over _the competitive _issues_raised_in_that
proceeding, (Suburban’s PUCO Complaint, p. 4) (emphasis added).
Moreover, in connection with Suburban’s 2013 Motion to Enforce filed in PUCO Case
No. 13-1216-GA-UNC, Suburban’s Chairman, David L. Pemberton, testified as follows
regarding the exact same Stipulation terms (i.e., Section A, Paragraph 10) at issue in Suburban’s
Complaint in this case:
{7244600:4 }
Q. The Settlement Agreement has been characterized as
simply a sale and transfer of facilities and customers. Do you
agree with this characterization?
A. No, it was much more. The sale and transfer of facilities
was not the main object of the Settlement Agreement. As the
Settlement Agreement, itself, makes clear, the main object of the
6Settlement Agreement was to resolve the extensive, costly, and
ongoing litigation between the parties regarding the practices and
methods employed by Columbia in competing with Suburban and
the sale and transfer of facilities was merely ancillary to this
purpose. Accordingly, failure _to enforce the Settlement
Agreement, including specifically, paragraph A.10, would
return_the parties to the same destructive _and_ wasteful
environment_which_ the Commission found _not_to_be_in_the
public_interest_when_it_assisted_the_parties in_resolving their
competitive difficulties. That _is why the parties specifically
provided_for_the Commission’s continuing jurisdiction “to
supervise and_ assure the Parties’ compliance with [the] Joint
Stipulation and Recommendation of the Parties.” (Paragraph
C.5 of the Settlement Agreement).
See Exhibit A to Columbia Gas’ Reply Brief (emphasis added).°
As aresult of Suburban’s frivolous conduct, Columbia Gas filed its Motion to Dismiss on
November 2, 2017. After full briefing by the parties, this Court issued a Judgment Entry
Granting Motion to Dismiss on February 5, 2018. In its Judgment Entry, this Court referenced
and quoted many of the same statutes, case law, and arguments contained in Columbia Gas’
October 13, 2017 Letter to Suburban:
The PUCO “has exclusive jurisdiction over various matters
involving public utilities, such as rates and charges, classifications,
and service, effectively denying to all Ohio courts (except [the
Ohio Supreme Court]) any jurisdiction over such matters.” State
ex rel. Cleveland Elec. Illam. Co. v. Cuyahoga Cty. Court of
Common Pleas, 88 Ohio St.3d 447, 450, 727 N.E.2d 900 (2000).
Courts such as this one are expressly prohibited from reviewing
any PUCO order or interfering with the PUCO’s performance of
official duties. R.C. 4903.12.
Common pleas courts retain limited subject matter jurisdiction
over pure common law tort and certain contract actions involving
utilities regulated by the PUCO. Such limited subject matter
jurisdiction may exist upon consideration of (1) whether the
“PUCO’s administrative expertise is required to resolve the issue
in dispute,” and (2) whether “the act complained of constitute[s] a
practice normally authorized by the utility.” Allstate Ins. Co. v.
6 A full and complete copy of Mr. Pemberton, Sr.’s Pre-Filed Direct Testimony in PUCO Case No. 13-1216-
GA-UNC was filed on December 8, 2017 in this action.
{7244600:4 } 7Cleveland Elec. Hlum. Co., 119 Ohio St.3d 301, 2008-Ohio-3917,
893 N.E.2d 824, { 12. If the answer to either of the two Allstate
prongs is in the negative, the PUCO does not have exclusive
jurisdiction over the matter. /d. at { 13.
% % *
The PUCO’s expertise will be necessary to interpret the PUCO’s
own order as a whole, as such interpretation requires an
understanding of statutes that are exclusively within the PUCO’s
purview, and further requires an understanding of the PUCO’s own
goals in reaching its decision in 1996. The circumstances in this
matter therefore satisfy the first prong of the Ad/state test.
% % *
The acts complained of in Suburban’s complaint involve
Columbia’s failure to go through a specific process of
interconnection of gas pipelines as provided in an order of the
PUCO. The interconnection process requires the consent and
approval of the PUCO. R.C. 4905.48. This matter therefore
involves a practice that is normally undertaken by a utility
company, regulated by the PUCO, and which was explicitly
governed by the PUCO’s 1996 order. The circumstances in this
matter satisfy the second prong of the Al/state test.
Given the foregoing, the answer to both prongs of the Allstate test
is in the affirmative. Suburban’s claims are within the exclusive
jurisdiction of the PUCO.
Judgment Entry, pp. 3-5; see also Columbia Gas’ October 13, 2017 Letter.
In its Judgment Entry, this Court also stated that it would not consider Columbia Gas’
request for attorney fees absent a separate motion and memorandum in support. See Judgment
Entry, p. 5. Accordingly, Columbia Gas now files the instant Motion for Attorney Fees and
Memorandum in Support.
Il. LAW AND ARGUMENT
A. Standard for Attorney Fees Pursuant to R.C, 2323.51
Pursuant to R.C. 2323.51, frivolous conduct means any of the following:
{7244600:4 } 8(i) Conduct that obviously serves merely to harass or maliciously
injure another party to the civil action or appeal or is for another
improper purpose, including, but not limited to, causing
unnecessary delay or a needless increase in the cost of litigation.
(ii) Conduct that is not warranted under existing law, cannot be
supported by a good faith argument for an extension, modification,
or reversal of existing law, or cannot be supported by a good faith
argument for the establishment of new law.
(ii) Conduct consisting of allegations or other factual contentions
that have no evidentiary support or, if specifically so identified, are
not likely to have evidentiary support after a reasonable
opportunity for further investigation or discovery.
R.C. 2323.51(A)(2)(a)(i)-(iii). Ohio Revised Code Section 2323.51 applies broadly to all
conduct and imposes an objective standard for reviewing such conduct. See Murman v.
University Hospitals Health Systems, Inc., 8th Dist. Cuyahoga No. 104726, 2017-Ohio-540, {21
(‘Compared to the subjective standard applied under Civ.R. 11, sanctions under R.C. 2323.51
can be imposed under the less restrictive ‘objective’ standard to view the conduct of the
sanctioned person — rather than focus on what the person subject to sanctions actually thought, an
objective standard is essentially one that looks to what the reasonable person would have
thought”), citing Harris v. Rossi, 11th Dist. Trumbull No. 2016-T-0014, 2016-Ohio-7163.
Willfulness is not a prerequisite to awarding attorney fees under R.C. 2323.51. See Ceol
v. Zion Indus., Inc., 81 Ohio App.3d 289, 291, 610 N.E.2d 1076 (9th Dist. 1992). Because
““willfulness’ is not a prerequisite for relief, analysis of a claim under [R.C. 2323.51] boils down
to a determination of (1) whether an action taken by the party to be sanctioned constitutes
“frivolous conduct,’ and (2) what amount, if any, of reasonable attorney fees necessitated by the
frivolous conduct is to be awarded to the aggrieved party.” Jd. (reversing the trial court’s denial
of attorney fees under R.C. 2323.51 and holding that “conduct which ‘is not warranted under
existing law’ is frivolous * * *” and that “misinterpreting the state of the law” is not a valid
{7244600:4 } 9defense under R.C. 2323.51), citing Grimes v. Boebinger Agency, Inc., 5th Dist. Stark No. CA-
8417, 1991 WL 122345, *5-7 (June 25, 1991). An appellate court will not reverse a trial court’s
award of attorney fees under R.C. 2323.51 absent an abuse of discretion. See Crockett v.
Crockett, 10th Dist. Franklin No. 02AP-482, 2003-Ohio-585.
This Court may award attorney fees under R.C. 2323.51 only after conducting a hearing
in accordance with R.C. 2323.51(B)(2)(a)-(c). Ohio Revised Code Section 2323.5 1(B)(4) further
provides that “[a]n award made pursuant to division (B)(1) of this section may be made against a
party, the party’s counsel of record, or both.” In this case, Columbia Gas seeks to recover its
attorney fees from Suburban only.
B. Suburban’s Entire Lawsuit Constitutes Frivolous Conduct Under R.C.
2323.51
Ohio Revised Code Section 2323.51(B)(1) provides, in pertinent part, that “at any time
not more than thirty days after the entry of final judgment in a civil action or appeal, any party
adversely affected by frivolous conduct may file a motion for an award of court costs, reasonable
attorney’s fees, and other reasonable expenses incurred in connection with the civil action or
appeal.” By failing to conduct a reasonable inquiry into the facts and law allegedly supporting
Suburban’s claims and by refusing to voluntarily dismiss its Complaint without prejudice after
Columbia Gas advised Suburban that this Court lacks subject matter jurisdiction, Suburban
engaged in frivolous conduct under R.C. 2323.51 and forced Columbia Gas to incur unnecessary
attorney fees in this case. Suburban’s frivolous conduct is exacerbated by Suburban’s own
repeated and contradictory admissions concerning the PUCO’s subject matter jurisdiction over
the Stipulation and PUCO Order. Columbia Gas therefore is entitled to recover its attorney fees
from Suburban in this case.
{7244600:4 } 10The Supreme Court of Ohio has made clear that a party engages in frivolous conduct by
pursuing a claim when “reasonable inquiry by a party’s counsel of record should reveal the
inadequacy of a claim * * *.” Ron Scheiderer & Associates v. City of London, 81 Ohio St.3d 94,
97-98, 689 N.E.2d 552, 1998-Ohio-453; see also Lewis v. Celina Fin. Corp., 101 Ohio App.3d
464, 473, 655 N.E.2d 1333 (3d Dist. 1995) (failure to properly investigate claims prior to filing
such claims constitutes frivolous conduct under R.C. 2323.51); Jefferson v. Creveling, 9th Dist.
Summit No. 24206, 2009-Ohio-1214, {16 (affirming award of attorney fees and recognizing that
“fajn attorney’s ignorance of the law or failure to investigate the law is not deemed objectively
reasonable”); All Climate Heating and Cooling v. Zee Properties, Inc., 10th Dist. Franklin No.
OLAP-784, 2002 WL 722968, *3 (Apr. 25, 2002) (affirming trial court’s finding that attorney
fees were warranted where plaintiffs either had facts, ignored facts, or refused to investigate facts
the majority of which, if not all of which, were in possession of plaintiffs or otherwise easily
available to them).
In this case, Suburban’s Complaint indisputably centers upon the Stipulation and PUCO
Order. Ohio Revised Code Section 4903.12 states: “No court other than the supreme court shall
have power to review, suspend, or delay any order made by the public utilities commission, or
enjoin, restrain, or interfere with the commission or any public utilities commissioner in the
performance of official duties.” R.C. 4903.12; see also Columbia Gas’ October 13, 2017 Letter,
p. 2; Judgment Entry, p. 3. The PUCO alone, subject to review solely by the Supreme Court of
Ohio, therefore has the power to review, interpret, and enforce its PUCO Order adopting and
approving the Stipulation at issue in this case.
Moreover, Suburban’s claims regarding the Stipulation and PUCO Order indisputably
involved public utility rate and service matters that fall within the Commission’s exclusive
{7244600:4 } 11jurisdiction. See State ex rel. Illum. Co. v. Cuyahoga Cty. Court of Common Pleas, 97 Ohio
St.3d 69, 72 (2002) (‘The [C]ommission has exclusive jurisdiction over various matters
involving public utilities, such as rates and charges, classifications, and service, effectively
denying to all Ohio courts (except [the Supreme Court of Ohio]) any jurisdiction over such
matters.”), quoting State ex rel. Cleveland Elec. Hlum. Co. v. Cuyahoga Cty. Court of Common
Pleas, 88 Ohio St.3d 447, 450 (2000); see also Columbia Gas’ October 13, 2017 Letter, p. 3;
Judgment Entry, p. 3. Because both prongs of the Al/state test are satisfied in the affirmative, the
PUCO -— not the Delaware County Court of Common Pleas — possesses exclusive jurisdiction
over Suburban’s claims against Columbia Gas. See Columbia Gas’ October 13, 2017 Letter, p.
3; see also Judgment Entry, pp. 4-5.
Suburban knew all of this to be true when it filed its Complaint against Columbia Gas in
this case. Suburban’s frivolous conduct is evidenced by Suburban’s own admissions and filings.
The Stipulation and PUCO Order provide that “the Commission shall retain continuing
jurisdiction in this matter to supervise and assure the Parties’ compliance with [the Stipulation].”
See Stipulation, Section C, ¥5; see also PUCO Order, p. 6. Relying upon such language,
Suburban on at least three separate occasions has initiated proceedings against Columbia Gas
before the PUCO — not a court of common pleas — alleging that Columbia Gas had violated the
Stipulation and PUCO Order, requesting the PUCO to enforce the Stipulation and PUCO Order
against Columbia Gas, and specifically invoking the PUCO’s jurisdiction over the Stipulation
and PUCO Order. See Suburban’s PUCO Complaint, 2007 Motion to Enforce, and 2013 Motion
to Enforce; see also Mr. Pemberton, Sr.’s Pre-Filed Direct Testimony, p. 20. In fact, Suburban’s
2013 Motion to Enforce centered upon Section A, Paragraph 10 of the Stipulation — the exact
same provision at issue in Suburban’s Complaint in this case.
{7244600:4 } 12Ignoring unambiguous Ohio law and its own repeated admissions and filings concerning
the PUCO’s subject matter jurisdiction over the Stipulation and PUCO Order, Suburban filed its
Complaint against Columbia Gas in the Delaware County Court of Common Pleas. In an
attempt to avoid unnecessary time and expense by the parties and also preserve judicial
resources, Columbia Gas requested that Suburban voluntarily dismiss its Complaint without
prejudice as a result of this Court’s lack of subject matter jurisdiction. Suburban glibly rejected
Columbia Gas’ request, thereby forcing Columbia Gas to obtain a court-ordered dismissal of
Suburban’s Complaint.
Ohio courts routinely hold that a party engages in frivolous conduct when that party
learns that claims are unwarranted under law but continues to pursue such claims. See Taylor v.
Franklin Blvd. Nursing Homes, Inc., 112 Ohio App.3d 27, 31-32, 677 N.E.2d 1212 (8th Dist.
1996) (an award of sanctions is proper where plaintiffs counsel pursued claims against
defendant despite the fact that the merits of the lawsuit disappeared after filing); Masturzo v.
Revere Rd. Synagogue, 98 Ohio App.3d 347, 353, 648 N.E.2d 585 (9th Dist. 1994) (finding of
frivolous conduct affirmed where plaintiff failed to dismiss lawsuit against defendant in timely
fashion after learning claims lacked merit); Bikkani v. Lee, 8th Dist. Cuyahoga No. 89312, 2008-
Ohio-3130 (reversing trial court’s denial of attorney fees where party subjected to frivolous
filing sent a letter to the opposing party requesting voluntary dismissal shortly after complaint
was filed, but the party that filed frivolous claims refused to dismiss the complaint).
Despite the fact that Suburban clearly knew that this Court lacks subject matter
jurisdiction over its claims (evidenced by its PUCO admissions and filings concerning the exact
same Stipulation and PUCO Order), Suburban frivolously commenced this lawsuit in the
Delaware County Court of Common Pleas and continued to pursue its unwarranted claims even
{7244600:4 } 13after receipt of Columbia Gas’ October 13, 2017 Letter. In fact, on October 20, 2017, just one
week after receipt of Columbia Gas’ letter demonstrating this Court’s lack of subject matter
jurisdiction, Suburban doubled down on its frivolous conduct by filing its PUCO Complaint
against Columbia Gas in which it affirmatively pleads that the PUCO has subject matter
jurisdiction over claims centering upon the exact same Stipulation and PUCO Order. See
Suburban’s PUCO Complaint, pp. 2, 4.
Suburban has engaged in the type of frivolous conduct that warrants an award of attorney
fees under R.C. 2323.51. Columbia Gas was required to expend significant time and resources
to obtain a court-ordered dismissal of Suburban’s Complaint, which, put simply, never should
have been filed in the first place. To deter such meritless litigation tactics, this Court should
award Columbia Gas its attorney fees from Suburban pursuant to R.C. 2323.51.
Cc This Court Should Award Columbia Gas Its Attorney Fees
Ohio Revised Code Section 2323.51(B)(5)(a) provides, in pertinent part, that:
[Elach party who may be awarded reasonable attorney’s fees and
the party’s counsel of record may submit to the court or be ordered
by the court to submit to it, for consideration in determining the
amount of reasonable attorney’s fees, an itemized list or other
evidence of the legal services rendered, the time expended in
rendering the services, and * * * the attorney’s fees associated with
those services.
R.C. 2323.51(B)(5)(a)(ii). When determining the amount of attorney fees, “a trial court is
guided by a two-step determination. The trial court first calculates the ‘lodestar’ by multiplying
the number of hours reasonably expended by a reasonable hourly rate, and, second decides
whether to adjust that amount based on the reasonableness factors listed in Prof.Cond.R. 1.5(a).”
Cruz v. English Nanny & Governess School Inc., 8th Dist. Cuyahoga No. 103714, 2017-Ohio-
4176, 797, citing Bittner v. Tri-County Toyota, Inc., 58 Ohio St.3d 143, 569 N.E.2d 464, syllabus
(1991) (applying the predecessor to Prof.Cond.R. 1.5(a)). The factors set forth under
{7244600:4 } 14Prof.Cond.R. 1.5(a) to be considered in determining reasonableness are: (1) the time and labor
required, the novelty and difficulty of the questions involved, and the skill requisite to perform
the legal service properly; (2) the likelihood, if apparent to the client, that the acceptance of the
particular employment will preclude other employment by the lawyer; (3) the fee customarily
charged in the locality for similar legal services; (4) the amount involved and the results
obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature
and length of the professional relationship with the client; (7) the experience, reputation, and
ability of the lawyer or lawyers performing the services; and (8) whether the fee is fixed or
contingent.
The Supreme Court of Ohio has held that an award of attorney fees made by a court
pursuant to R.C. 2323.51 “may include fees incurred in prosecuting a motion for sanctions.”
City of London, 81 Ohio St.3d 94, syllabus; see also Ferron v. Video Professor, Inc., 5th Dist.
Delaware, 2009-Ohio-3133, {111 (affirming trial court’s award of attorney fees incurred in the
prosecution of a motion for sanctions because such “attorney fees would logically include fees
incurred at the actual hearing on the motion for sanctions.”). Notwithstanding this fact,
Columbia Gas is not seeking to recover its attorney fees incurred in conjunction with the filing
and prosecution of the instant Motion for Attorney Fees. Columbia Gas instead only seeks to
recover its attorney fees incurred through February 8, 2018, the date of receipt of this Court’s
February 5, 2018 Judgment Entry dismissing Suburban’s Complaint for lack of subject matter
jurisdiction.
From the filing of Suburban’s frivolous lawsuit through February 8, 2018, Columbia Gas
incurred attorney fees in the total amount of $87,436.50, broken down as follows:
{7244600:4 } 15Attorney Name Hourly Rate’ Total Hours Total Fees
Matthew R. Rechner $390.00 122.50 $47,775.00
Adam C. Smith $230.00 157.70 $36,271.00
William Beckley $225.00 11.10 $2,497.50
Erin W. Cicarella $235.00 3.80 $893.00
See Affidavit of Stephen Kandra III in Support of Motion of Defendant Columbia Gas of Ohio,
Inc. for Attorney Fees Pursuant to R.C. 2323.51 (“Kandra Affidavit”) attached hereto as Exhibit
C. 15; see Exhibit 1 attached to Kandra Affidavit; see also State ex rel. Pietrangelo v. Avon Lake,
146 Ohio St.3d 292, 294, 55 N.E.3d 1091, 2016-Ohio-2974 (recognizing that “narrative portions
of itemized attorney-fee billing statements containing descriptions of legal services performed by
counsel are protected by attorney-client privilege’) (citations omitted). The itemized time entries
attached to the Kandra Affidavit as Exhibit 1 provide “sufficient detail and probative value to
enable the court to determine with a high degree of certainty that such hours were actually and
reasonably expended in the prosecution of the litigation.” See Penn, LLC v. Prosper Business
Development Corp., S.D.Ohio No. 2:10-cv-993, 2012 WL 3583258, *13 (Aug. 20, 2012); see
also Wehr v. Petraglia, 7th Dist. Columbiana No. 14 CO 7, 2016-Ohio-3126, 4441-42.
Nevertheless, Columbia Gas will provide the Court with unredacted, itemized time entries for in
camera review and/or subject to an appropriate protective order should the Court require
additional detail associated with the time entries of Columbia Gas’ attorneys.
William H. Falin, Esq., an attorney at the law firm of Moscarino & Treu LLP in
Cleveland, Ohio, has reviewed the itemized time entries for Mr. Rechner, Mr. Smith, Ms.
Cicarella, and Mr. Beckley attached as Exhibit 1 to the Kandra Affidavit. See Affidavit of
William H. Falin, Esq. Regarding Reasonableness of Attorney Fees of Defendant Columbia Gas
7 Mr. Rechner’s current standard hourly rate is $465.00, Mr. Smith’s current standard hourly rate is $275.00,
Ms. Cicarella’s current standard hourly rate is $380.00, and Mr. Beckley’s current standard hourly rate is $265.00.
See Kandra Affidavit, 94.
{7244600:4 } 16of Ohio, Inc. (‘“Falin Affidavit”), 4 (attached hereto as Exhibit D). It is the opinion of Mr. Falin
that the hourly rates charged by McDonald Hopkins in this action are within the range of rates
reasonably and customarily charged for litigation services. See id., J5. In finding that the hourly
rates charged and number of hours expended by McDonald Hopkins are reasonable, Mr. Falin
considered the “lodestar” factors set forth under Prof.Cond.R. 1.5(a). See id., [6. It also is the
opinion of Mr. Falin that the time and labor expended by McDonald Hopkins were reasonable
and customary and that such time and labor were associated with obtaining a court-ordered
dismissal of Suburban’s Complaint. See id. Mr. Falin’s opinions are based upon his personal
knowledge, training, and experience as a practicing attorney and his review of the case as set
forth above. See id.
Tl. CONCLUSION
Based upon the foregoing and Suburban’s frivolous conduct in this action, Columbia Gas
respectfully requests that this Court, after conducting a hearing pursuant to R.C.
2323.5 1(B)(2)(a)-(c), enter an Order awarding Columbia Gas its attorney fees in the amount of
$87.4306.50 from Suburban pursuant to R.C. 2323.51.
{7244600:4 } 17{7244600:4 }
Respectfully submitted,
s/ Matthew R. Rechner
MATTHEW R. RECHNER (0074446)
ADAM C. SMITH (0087720)
McDonald Hopkins LLC
600 Superior Avenue East, Suite 2100
Cleveland, Ohio 44114-2653
Telephone: (216) 348-5400
Facsimile: (216) 348-5474
i @modonaldhopkia
ANTHONY M. HEALD (0002095)
Heald Law
125 North Sandusky Street
Delaware, Ohio 43015
Telephone: — (740) 363-1369
Facsimile: (740) 369-1616
Email: tonybeatl @ A
Counsel for Defendant Columbia Gas of Ohio, Inc.
18CERTIFICATE OF SERVICE
A copy of the foregoing Motion of Defendant Columbia Gas of Ohio, Inc. for
Attorney Fees Pursuant to R.C. 2323.51 was served via electronic mail on March 7, 2018
upon:
Stephen D. Martin, Esq.
Manos, Martin & Pergram Co., LPA
50 North Sandusky Street
Delaware, Ohio 43015
Mark A. Whitt, Esq.
Whitt Sturtevant LLP
KeyBank Building
88 E. Broad Street, Suite 1590
Counsel for Plaintiff
Suburban Natural Gas Company
s/ Matthew R. Rechner
MATTHEW R. RECHNER (0074446)
ADAM C. SMITH (0087720)
McDonald Hopkins LLC
ANTHONY M. HEALD (0002095)
Heald Law
Counsel for Defendant Columbia Gas of Ohio, Inc.
472446004 } 19EXHIBIT AMcDonald .
—_—_—_— Hopki ns McDonald Hopkins LLC
600 Superior Avenue, East
A business advisory and advocacy faw firm® Suite 2100
Cleveland, OH 44114
Direct Dial; 216-348-5826, P 1.216.348.5400
E-mail: mrechner@mcdonaldhopkins,com F 1.216.348,5474
October 13, 2017
VIA ELECTRONIC MAIL
AND REGULAR U.S. MAIL
Stephen D. Martin, Esq. (smartin@mmpdlaw.com)
Manos, Martin & Pergram Co., LPA
50 North Sandusky Street
Delaware, Ohio 43015
Mark A. Whitt, Esq. (whitt@whitt-sturtevant.com’
Whitt Sturtevant LLP
KeyBank Building
88 East Broad Street, Suite 1590
Columbus, Ohio 43215
Re: Suburban Natural Gas Company v. Columbia Gas of Ohio, Inc.
Delaware County Court of Common Pleas
Case No. 17-CVH-100585
Dear Counsel:
As you know, this law firm represents Defendant Columbia Gas of Ohio, Inc. (“Columbia
Gas”) in connection with the above-captioned action.
We have reviewed the Complaint filed by Plaintiff Suburban Natural Gas Company
(“Suburban”) in this action. As set forth below, the Delaware County Court of Common Pleas
lacks subject matter jurisdiction because exclusive jurisdiction over this matter lies solely with
the Public Utilities Commission of Ohio (the “Commission”). Columbia Gas therefore requests
that Suburban immediately dismiss, without prejudice, its Complaint filed in the Delaware
County Court of Common Pleas.
Without addressing the merits (or lack thereof) of your client’s claims, Suburban’s
Complaint centers upon:
(1) a Sccond Amended Joint Petition, Application, and Stipulation and
Recommendation (the “Stipulation”), jointly filed by Suburban and Columbia Gas
on November 9, 1995 in PUCO Case Nos, 93-1569-GA-SLF, 93-938-GA-ATR,
and 94-939-GA-ATA (attached as Exhibit A to Suburban’s Complaint); and
47014283:3} Chicago | Cleveland | Columbus { Detroit | Miami | West Palm Beach
www.medonaldhopkins.com(2) the Commission’s Finding and Order (the “Commission Order”), entered on
January 18, 1996 in the above-referenced PUCO proceedings, adopting and
approving the Stipulation and ordering Suburban and Columbia Gas to comply
with its directives (attached as Exhibit B to Suburban’s Complaint).
The jurisdictional terms of the Stipulation and Commission Order are expressly clear: “The
Com: ion shall retain continuing jurisdiction in this matter to superyise and assure the
Parties’ compliance with this Joint Stipulation and Recommendation of the Parties.” See
Stipulation, Section C, §§ (emphasis added); see also Commission Order, p. 6 (ordering that the
Stipulation is approved and adopted). If Suburban contends, as it does in its Complaint, that
Columbia Gas allegedly has failed to comply with certain obligations purportedly owed to
Suburban pursuant to the Stipulation and Commission Order, the Commission — not the
Delaware County Court of Common Pleas — has “continuing jurisdiction...to supervise and
assure the [p]arties’ compliance” with the Stipulation and Commission Order. See id.
Notwithstanding the parties’ express consent and the Commission Order regarding the
Commission’s continuing jurisdiction over this matter, Ohio law is clear that the Comimission
has sole and exclusive jurisdiction over dispules centering upon its own orders. Ohio Revised
Code 4903.12 states: “No court other than the supreme court shall have power to review,
suspend, or delay any order made by the public utilities commission, or enjoin, restrain, or
interfere with the commission or any public utilities commissioner in the performance of official
duties.” O.R.C, 4903.12, The Commission alone, subject to review solely by the Supreme Court
of Ohio, has the power to review, interpret, and enforce its own orders, including the
Commission Order adopting and approving the Stipulation and ordering Suburban and Columbia
Gas to comply with ils directives.. Any exercise of jurisdiction by the Delaware County Court
of Common Pleas over this matter, according to the Supreme Court of Ohio, would constitute an
“usurpation of [the Commission’s] authority.” See e.g., State ex rel. Columbus Southern Power
Co. v. Fais, 117 Ohio St.3d 340 (2008), citing State ex rel. N. Ohia Tel. Co. y. Winter, 23 Ohio
St.2d 6 (1970).
Lastly, the Delaware County Court of Common Pleas lacks subject matter jurisdiction
over Suburban’s claims against Columbia Gas because they indisputably involve natural gas
public utility rate and service matters that fall within the Cammission’s exclusive jurisdiction.
Suburban claims that Columbia Gas is required to allow Suburban to interconnect to Columbia
Gas’ Northern Loop pipeline to supply additional natural gas into Suburban’s distribution system
' Commission approval of the Stipulation in the above-referenced PUCO proceedings was required before its
terms became binding upon the parties. Ohio Revised Code 4905.48 states, in relevant part: “With the consent and
approval of the public utilities comm mn: (A) Any two or more public utilities furnishing a like service or product
and doing business in the same municipal corporation or locality within this state, or any two or more public utilities
whose lines intersect or parallel each other within this state, may enter into contracts with each other that will enable
ihem to operate their lines or plants in connection with each other.” O.R.C. 4905.48; see also Stipulation, Section
A, 41 (“The Partics are willing to enter into an agreement as set forth herein to transfer certain customers and
facilities located in the Countics of Franklin and Delaware, State of Ohio, subject to the active supervision,
direction, and consent and approval of the Commission pursuant to R.C. § 4905.48.”); Stipulation, Section C, (3 (IP
the Commission rejects any part or all of this Stipulation, the Parties agree that the Stipulation shall be null and void
and will be withdrawn, and shall not constitute any part of the record in this proceeding, nor shall it be used for any
purpose whatsoever by any party to this or any other proceeding.”).
2 McPonalal iopkins
A business advisory and advaceicy low firm*
€7014253:3}and that Columbia Gas’ alleged violation of the Stipulation and Commission Order is
diminishing and threatening Suburban’s ability to supply and service its customers in Delaware
County, Ohio. See Complaint, Preamble and §91, 6, 7, 9, 13, 14, 15, 16, 17, 18, 22, 23, 27. In
support of its claims, Suburban quotes and relies upon Section A, Paragraph 10 of the
Stipulation, which states:
Nothing in this Stipulation shall be construed as preventing Columbia [Gas] from
installing, in any of the areas described, a high-pressure natural gas pipeline, the
purpose of which is to be limited to transporting gas from existing and future
sources of supply to various gas distribution systems owned and operated by
Columbia [Gas] in southern Delaware and northern Franklin Counties to points
outside of said areas, which pipeline shall also be available, subject _to
appropriate rate_and service conditions, as a supply source for Suburban’s
system.
Complaint, §13 (emphasis added). Suburban further contends that this above language “was
(and is) an essential term of the Stipulation.” /d., (14.
“The [C]ommission has exclusive jurisdiction over various matiers involving public
utilities, such as rates and charges, classifications, and service, effectively denying to all Ohio
courts (except this court [the Supreme Court of Ohio]) any jurisdiction over such matters.” Srate
ex rel. illum. Co. v. Cuyahoga Cty. Court of Common Pleas, 97 Obio St.3d 69, 72 (2002),
quoting State ex rel. Cleveland Elec, lum. Co. v. Cuyahoga Cty. Court of Common Pleas, 88
Ohio St.3d 447, 450 (2000). Suburban’s claims, on their face, involve natural gas public utility
rate and service issues. Suburban alleges that Columbia Gas is required to allow Suburban to
interconnect to Columbia Gas’ Northern Loop pipcline pursuant to the Stipulation and
Commission Order and secks specific performance from Columbia Gas in order for Suburban to
continue to supply and service its customers in Delaware County, Ohio. However, and again
without addressing the merits (or lack thereof) of Suburban’s claims, the relief sought by
Suburban would be “subject to appropriate rate and service conditions.” See Stipulation, Section
A, 410; see also Commission Order, p. 6. The Commission indisputably has exclusive
jurisdiction regarding the determination of “appropriate rate and service conditions” for natural
gas public utilities.
Suburban’s claims also relate to normally authorized practices of a natural gas public
utility (ie., a natural gas public utility’s interconnection to another natural gas public utility’s
pipelines) and require the Commission’s expertise to resolve the parties’ dispute (Z.e., whether
Columbia Gas is required to allow Suburban to interconnect to Columbia Gas’ Northern Loop
pipeline and whether Columbia Gas purportedly has failed to comply with the Stipulation and
Commission Order). See DiFranco y. FirstEnergy Corp., 134 Ohio St.3d 144, 150 (2012), citing
Allstate Ins. Co. v. Cleveland Elec. Mlum. Co., 119 Ohio St.3d 301 (2008). It is indisputable that
the Commission’s involvement and expertise are necessary since it “actively supervised” the
parties’ resolution of the prior PUCO proceedings, which resulted in the Stipulation and
Commission Order at issue in this case, See Stipulation, p. 2. Additionally, as set forth above,
the Commission’s expertise also is required for Suburban to obtain the relief it seeks (i¢.,
interconnection to Columbia Gas’ Northern Loop pipeline) because such requested relief would
McDonald .
{7014253:3} 3 ne HOD KING
A business advisory and advocacy law firm?be “subject to appropriate rate and service conditions.” See Stipulation, Section A, 10; see also
Commission Order, p. 6. Such natural gas public utility rate and service conditions are not
independent contractual matters that may be adjudicated by a common pleas court.
Accordingly, for the reasons set forth above, the Commission — not the Delaware County
Court of Common Pleas — possesses exclusive jurisdiction over Suburban’s claims against
Columbia Gas. Columbia Gas therefore requests that Suburban voluntarily dismiss, without
prejudice, its Complaint against Columbia Gas on or before Thursday, October 19, 2017. If
Suburban does not voluntarily dismiss its Complaint and Columbia Gas is required to move for
dismissal based upon lack of subject matter jurisdiction, please be advised that Columbia Gas
also will seck to recover its associated attorney fees and costs pursuant to Rule 11 of the Ohio
Rules of Civil Procedure and R.C, 2323.51 as a result of Suburban’s improperly fited Complaint
in this action.
Sincerely,
Mask Rj
Matthew R. Rechner
MRR/Ik
ce: Adam C. Smith, Esq. (via email)
McDonald .
(7014253:3} 4 a Hopkins
A business advinciy and advocacy kaw ficr®EXHIBIT BFrom: Mark Whitt
Sent: Monday, October 16, 2017 5:50 PM
To: Rechner, Matthew; Stephen D. Martin (smartin@mmpdlaw.com)
Ce: Smith, Adam
Subject: Re: Suburban Natural Gas Company v. Columbia Gas of Ohio, Inc.; Delaware County
Court of Common Pleas; Case No. 17-CVH-100585
Mr. Rechner —
We have your letter threatening to pursue sanctions if Suburban Natural Gas Co. does not dismiss the referenced case.
As one of the lawyers who litigated several of the cases you cite, you may rest assured that we carefully considered the
jurisdictional issue before filing the complaint. If you wish to file a motion to dismiss, that is your prerogative. We do not
believe it would productive to debate the jurisdictional issue with you via letter or email.
Mark A. Whitt
whitt
The KeyBank Building
88 E. Broad Street, Suite 1590
Columbus, Ohio 43215
614.224.3911 (direct)
614.804.6034 (mobile)
whilt@whitt-stertevantcont
From: Matthew Rechner
Date: Friday, October 13, 2017 at 3:34 PM
To: "Stephen D. Martin (sraartin@mmodiaw.cam)" , Mark Whitt
Ce: "Smith, Adam"
Subject: Suburban Natural Gas Company v. Columbia Gas of Ohio, Inc.; Delaware County Court of Common
Pleas; Case No. 17-CVH-100585,
Counsel —
Please see the attached correspondence in connection with the above-captioned action.
Regards,
Matt Rechner
Matthew R. Rechner
Reeetiar
T: 216.348.5826 600 Superior Avenue East
F: 216.348.5474 Suite 2100
mrechner@mcdonaldhopkins.com Cleveland, OH 44114
Wwww.mcdonaldhopkins.comEXHIBIT CIN THE COURT OF COMMON PLEAS
DELAWARE COUNTY, OHIO
SUBURBAN NATURAL GAS COMPANY, CASE NO, 17-CVH-100585
Plaintiff, JUDGE EVERETT H. KRUEGER
TLIN SUPPORT OF MOTION OF
DEFENDANT COLUMBIA GAS OF
OHIO, INC. FOR ATTORNEY FEES
)
)
)
) AFFIDAVIT OF STEPTIEN KANDRA
)
COLUMBIA GAS OF OHIO, INC., )
)
)
)
Defendant. PURSUANT TO R.C. 2323.51
STATE OF OHIO )
) SS:
COUNTY OF CUYAHOGA )
Stephen Kandra III, being first duly sworn, deposes and says:
1. 1 am an active certified public accountant and employed as the Controller for
McDonald Hopkins LLC (“McDonald Hopkins”).
2. As the Controller for McDonald Hopkins, 1 am responsible for the day-to-day
activities of McDonald Hopkins’ Accounting Department. McDonald Hopkins’ Accounting
Department is responsible for numerous accounting-rclated activities, including, but not limited
to, issuing invoices to clients, receiving payment from clients, tracking accounts receivable, and
providing monthly financial reporting statistics.
3. As Controller for McDonald Hopkins, I am familiar with details concerning the
issuance of invoices to clients, including the invoices (the “Invoiccs”) issued to Defendant
Columbia Gas of Ohio, Inc. (“Columbia Gas”) for work performed by McDonald Hopkins on
behalf of Columbia Gas relative to this lawsuit from October 5, 2017 through February 8, 2018
as set forth in redacted, itemized time entries (the “Redacted, Itemized Time Entries”). True and
{7252956:3 }accurate copies of the Invoices and Redacted, Itemized Time Entries are attached hereto as
Exhibit 1.
4, The current standard hourly rate for Matthew R. Rechner, Esq. is $465.00, for
Adan C. Smith, Esq. is $275.00, for William Beckley, Esq. is $265.00, and for Erin Cicarella,
Esq. is $380.00.
5. As set forth in the Redacted, Itemized Time Entries, the current hourly rate
charged to Columbia Gas by McDonald Hopkins for legal services provided by Matthew R.
Rechner, Esq. is $390.00, for Adam C. Smith, Esq. is $230.00, for William Beckley, Esq. is
$225.00, and for Erin Cicarella, Esq. is $235.00. See Exhibit 1.
6. The November 17, 2017 invoice was issued regarding work performed by
McDonald Hopkins on behalf of Columbia Gas from October 5, 2017 through October 31, 2017.
See Exhibit 1. The total amount billed to Columbia Gas for such work was $49,557.50. Jd.
Columbia Gas paid McDonald Hopkins $49,557.50.
7. The December 12, 2017 invoice was issued regarding work performed by
McDonald Hopkins on behalf of Columbia Gas from November 1, 2017 through November 30,
2017. See Exhibit 1. The total amount billed to Columbia Gas for such work was $24,878.00.
Jd. Columbia Gas paid McDonald Hopkins $24,878.00.
8. ‘The January 17, 2018 invoice was issued regarding work performed by McDonald
Llopkins on behalf of Columbia Gas from December 1, 2017 through December 31, 2017. See
Exhibit 1. The total amount billed to Columbia Gas for such work was $10,685.00. Jd.
Columbia Gas paid McDonald Hopkins $10,685.00.
9. The February 16, 2018 invoice was issued regarding work performed by
McDonald Hopkins on behalf of Columbia Gas from January 1, 2018 through January 31, 2018.
{7252956:3 } 2See Exhibit 1. The total amount billed to Columbia Gas for such work was $858.00. Id.
Columbia Gas paid McDonald Hopkins $858.00.
10. The March 2, 2018 invoice was issued regarding work performed by McDonald
Hopkins on behalf of Columbia Gas from February 1, 2018 through February 8, 2018. See
Exhibit 1. The total amount billed to Columbia Gas for such work was $1,458.00. id.
FURTHER, AFFIANT SAYETH NOT.
Se ;
STEPHEN KANDRAS
ih
SWORN TO AND SUBSCRIBED in my presence this Fag day of March 2018.
JOSEPH M. MUSKA
Attorney Al Law
NOTARY PUB
Preview
IN THE COURT OF COMMON PLEAS DELAWARE COUNTY, OHIO SUBURBAN NATURAL GAS COMPANY, CASE NO. 17-CVH-100585 Plaintiff, JUDGE EVERETT H. KRUEGER MOTION OF DEFENDANT COLUMBIA GAS OF OHIO, INC, FOR ATTORNEY FEES PURSUANT TO RC, 2323.51 COLUMBIA GAS OF OHIO, INC., Defendant. Pursuant to R.C. 2323.51, Defendant Columbia Gas of Ohio, Inc. (“Columbia Gas”) moves this Court for an Order awarding Columbia Gas its attorney fees in this action from Plaintiff Suburban Natural Gas Company (“Suburban”). Suburban’s Complaint against Columbia Gas in this case was frivolous and unwarranted under existing Ohio law because this Court lacks subject matter jurisdiction over Suburban’s claims, a fact which Suburban at all times knew to be true. Accordingly, based upon the foregoing and for the reasons more fully set forth in the attached Memorandum in Support, Columbia Gas respectfully requests that this Court, after conducting a hearing pursuant to R.C. 2323.51(B)(2)(a)-(c), enter an Order awarding Columbia Gas its attorney fees in the amount of $87,436.50 from Suburban pursuant to R.C. 2323.51 as a result of Suburban’s frivolous conduct in this action. Soammon Blase Geurk Dslawars Connty, Ohio General Division £7244600:4 } Bed: 03/07/2018 03:04 PM{7244600:4 } Respectfully submitted, s/ Matthew R. Rechner MATTHEW R. RECHNER (0074446) ADAM C. SMITH (0087720) McDonald Hopkins LLC 600 Superior Avenue East, Suite 2100 Cleveland, Ohio 44114-2653 Telephone: — (216) 348-5400 Facsimile: (216) 348-5474 Email: mrechner@medonaldhopkins.com acsmith @medonaldhopking.com ANTHONY M. HEALD (0002095) Heald Law 125 North Sandusky Street Delaware, Ohio 43015 Telephone: — (740) 363-1369 Facsimile: (740) 369-1616 Email: tonyheatd @heald-law.com Counsel for Defendant Columbia Gas of Ohio, Inc.MEMORANDUM IN SUPPORT This lawsuit never should have been filed by Suburban, plain and simple. The Delaware County Court of Common Pleas lacks subject matter jurisdiction over Suburban’s claims against Columbia Gas, and more importantly, Suburban knew it. This type of frivolous conduct by Suburban warrants an award of Columbia Gas’ attorney fees pursuant to R.C. 2323.51. Columbia Gas respectfully requests that this Court hold a hearing pursuant to R.C. 2323.51(B)(2)(a)-(c) and thereafter award Columbia Gas its attorney fees in the amount of $87,436.50 from Suburban. This amount represents Columbia Gas’ attorney fees incurred in this action through February 8, 2018, the date of receipt of this Court’s February 5, 2018 Judgment Entry dismissing Suburban’s Complaint for lack of subject matter jurisdiction. I FACTS The background facts of this case are detailed in Columbia Gas’ Motion to Dismiss For Lack of Subject Matter Jurisdiction (the “Motion to Dismiss”), filed on November 2, 2017, and its corresponding Reply Brief (the “Reply Brief”), filed on December 8, 2017, both of which Columbia Gas incorporates herein by reference. Nevertheless, a brief recitation of such facts is worthwhile here. Suburban’s Complaint in this case centered upon a November 9, 1995 Stipulation between Suburban and Columbia Gas that was adopted and approved by the Public Utilities Commission of Ohio (the “PUCO”) and incorporated into a January 18, 1996 PUCO Order. See Complaint. The Stipulation and PUCO Order contain the following term: “The Commission shall_retain_ continuing jurisdiction_in_this_matter_to_supervise_and_assure the Parties’ L For ease of reference, Columbia Gas also incorporates and utilizes the same defined terms contained in its Motion to Dismiss and Reply Brief. {7244600:4 } 3compliance with this Joint Stipulation and Recommendation of the Parties.” See Stipulation, Section C, 5 (emphasis added); see also PUCO Order, p. 62 Notwithstanding such clear and unambiguous language, Suburban filed its Complaint against Columbia Gas on October 4, 2017 in the Delaware County Court of Common Pleas, not with the PUCO. On October 13, 2017, Columbia Gas sent Suburban a four-page letter detailing why this Court lacks subject matter jurisdiction over Suburban’s claims under Ohio law, including relevant Ohio Revised Code sections and Supreme Court of Ohio precedent, such as Allstate Ins. Co. v. Cleveland Elec. Illum. Co., 119 Ohio St.3d 301 (2008). A copy of Columbia Gas’ October 13, 2017 Letter is attached hereto as Exhibit A? Columbia Gas therefore requested that Suburban voluntarily dismiss its Complaint without prejudice and advised Suburban that Columbia Gas would seek to recover its attorney fees if it were forced to obtain a court-ordered dismissal of Suburban’s Complaint. See id. On October 16, 2017, Suburban responded to Columbia Gas with the following four-sentence email: We have your letter threatening to pursue sanctions if Suburban Natural Gas Co. does not dismiss the referenced case. As one of the lawyers who litigated several of the cases you cite, you may test assured that we carefully considered the jurisdictional issue before filing the complaint. If you wish to file a motion to dismiss, that is your prerogative. We do not believe it would productive to debate the jurisdictional issue with you via letter or email. A copy of Suburban’s October 16, 2017 Email is attached hereto as Exhibit B4 The frivolousness of Suburban’s conduct in this case, however, is exemplified by Suburban’s own admissions and filings before the PUCO. As set forth in Columbia Gas’ Motion 2 A copy of the PUCO Order, which incorporates the Stipulation as an exhibit thereto, is attached as Exhibit Ato Columbia Gas’ Motion to Dismiss. 3 Columbia Gas’ October 13, 2017 Letter also is attached as Exhibit C to Columbia Gas’ Motion to Dismiss. 4 Suburban’s October 16, 2017 Email also is attached as Exhibit D to Columbia Gas’ Motion to Dismiss. {7244600:4 } 4to Dismiss and Reply Brief, Suburban on_at least three separate occasions expressly relied upon and invoked the PUCO’s jurisdiction over the Stipulation and PUCO Order in PUCO proceedings initiated by Suburban against Columbia Gas. See Suburban’s 2007 Motion to Enforce, filed in PUCO Case No. 93-1569-GA-SLF; Suburban’s 2013 Motion to Enforce, filed in PUCO Case No. 13-1216-GA-UNC; and Suburban’s PUCO Complaint, filed in PUCO Case No. 17-2168-GA-CSS.° In these PUCO proceedings, like in this action, Suburban alleged that Columbia Gas purportedly violated the Stipulation and PUCO Order and requested the PUCO — not a court of common pleas — to enforce the Stipulation and PUCO Order against Columbia Gas. In fact, in one of those PUCO proceedings, Suburban sought to enforce the exact same Stipulation terms (i.e., Section A, Paragraph 10) at issue in Suburban’s Complaint in this case. See Suburban’s 2013 Motion to Enforce. Similarly, Count 1 of Suburban’s PUCO Complaint, which was filed sixteen (16) days after the filing of Suburban’s Complaint in this case, is expressly captioned: “Violation of the 1995 Stipulation.” See Suburban’s PUCO Complaint. More importantly, Suburban repeatedly admitted in these PUCO proceedings that the PUCO — not a court of common pleas — has subject matter jurisdiction over its claims against Columbia Gas concerning the Stipulation and PUCO Order: * The 2007 Motion to Enforce is filed “pursuant to Section C, Paragraph 5 of the Stipulation] filed and approved in the above-docketed proceedings [Case Nos. 93- 1569-GA-SLF, et al.] on November 9, 1995 and January 18, 1996, respectively * * *” (Suburban’s 2007 Motion to Enforce, p. 1) (emphasis added). e« ** * Suburban has no alternative but to seek enforcement of the Stipulation filed and approved in this case over which the Commission specifically retained continuing jurisdiction. (Suburban’s 2007 Motion to Enforce, p. 10) (emphasis added). « Columbia [Gas] is violating the Stipulation approved in these proceedings on January 18, 1996. The Commission retained continuing jurisdiction in these proceedings 5 Suburban’s PUCO Complaint, 2007 Motion to Enforce, and 2013 Motion to Enforce are attached as Exhibits E-G, respectively, to Columbia Gas’ Motion to Dismiss. {7244600:4 } 5to ensure the parties’ compliance with the Stipulation (see Section C, Paragraph 5_of the Stipulation). Accordingly, the Commission should reopen these proceedings, hold such hearings as it deems necessary, and grant the relief requested herein. In the alternative, Suburban respectfully requests that its motion and supporting memorandum be treated as a complaint pursuant to Section 4905.26 of the Ohio Revised Code and that proceedings be held in accordance with that section. (Suburban’s 2007 Motion to Enforce, p. 11) (emphasis added). The 2013 Motion to Enforce is filed “Lujnder § C, 5 of the [Stipulation] filed and adopted in the above-docketed proceedings [Case Nos. 93-1569-GA-SLF, et al.] on November 9, 1995 and January 18, 1996, respectively * * *.” (Suburban’s 2013 Motion to Enforce, p. 1) (emphasis added). Columbia [Gas] is violating the Stipulation adopted by the Commission in its Finding and Order. The Commission retained continuing jurisdiction _in_ these proceedings to_ensure_the parties’ compliance with the Stipulation_and_the Findings and Order adopting it. See § C, 15 of the Stipulation, Accordingly, the Commission should reopen these proceedings, hold such hearings as it deems necessary, and grant the relief requested herein. In the alternative, Suburban respectfully requests that its motion and supporting memorandum be treated as a complaint pursuant to O.R.C. § 4905.26 and that proceedings be held in accordance with that section. (Suburban’s 2013 Motion to Enforce, p. 6) (emphasis added). The Commission has personal jurisdiction over Columbia and subject matter jurisdiction to hear and decide this action under R.C. 4905.04, 4905.05, 4905.06, 4905.26, and 4929.08. (Suburban’s PUCO Complaint, p. 2) (emphasis added). In_its Finding and Order adopting the 1995 Stipulation, the Commission expressly_reserved jurisdiction over _the competitive _issues_raised_in_that proceeding, (Suburban’s PUCO Complaint, p. 4) (emphasis added). Moreover, in connection with Suburban’s 2013 Motion to Enforce filed in PUCO Case No. 13-1216-GA-UNC, Suburban’s Chairman, David L. Pemberton, testified as follows regarding the exact same Stipulation terms (i.e., Section A, Paragraph 10) at issue in Suburban’s Complaint in this case: {7244600:4 } Q. The Settlement Agreement has been characterized as simply a sale and transfer of facilities and customers. Do you agree with this characterization? A. No, it was much more. The sale and transfer of facilities was not the main object of the Settlement Agreement. As the Settlement Agreement, itself, makes clear, the main object of the 6Settlement Agreement was to resolve the extensive, costly, and ongoing litigation between the parties regarding the practices and methods employed by Columbia in competing with Suburban and the sale and transfer of facilities was merely ancillary to this purpose. Accordingly, failure _to enforce the Settlement Agreement, including specifically, paragraph A.10, would return_the parties to the same destructive _and_ wasteful environment_which_ the Commission found _not_to_be_in_the public_interest_when_it_assisted_the_parties in_resolving their competitive difficulties. That _is why the parties specifically provided_for_the Commission’s continuing jurisdiction “to supervise and_ assure the Parties’ compliance with [the] Joint Stipulation and Recommendation of the Parties.” (Paragraph C.5 of the Settlement Agreement). See Exhibit A to Columbia Gas’ Reply Brief (emphasis added).° As aresult of Suburban’s frivolous conduct, Columbia Gas filed its Motion to Dismiss on November 2, 2017. After full briefing by the parties, this Court issued a Judgment Entry Granting Motion to Dismiss on February 5, 2018. In its Judgment Entry, this Court referenced and quoted many of the same statutes, case law, and arguments contained in Columbia Gas’ October 13, 2017 Letter to Suburban: The PUCO “has exclusive jurisdiction over various matters involving public utilities, such as rates and charges, classifications, and service, effectively denying to all Ohio courts (except [the Ohio Supreme Court]) any jurisdiction over such matters.” State ex rel. Cleveland Elec. Illam. Co. v. Cuyahoga Cty. Court of Common Pleas, 88 Ohio St.3d 447, 450, 727 N.E.2d 900 (2000). Courts such as this one are expressly prohibited from reviewing any PUCO order or interfering with the PUCO’s performance of official duties. R.C. 4903.12. Common pleas courts retain limited subject matter jurisdiction over pure common law tort and certain contract actions involving utilities regulated by the PUCO. Such limited subject matter jurisdiction may exist upon consideration of (1) whether the “PUCO’s administrative expertise is required to resolve the issue in dispute,” and (2) whether “the act complained of constitute[s] a practice normally authorized by the utility.” Allstate Ins. Co. v. 6 A full and complete copy of Mr. Pemberton, Sr.’s Pre-Filed Direct Testimony in PUCO Case No. 13-1216- GA-UNC was filed on December 8, 2017 in this action. {7244600:4 } 7Cleveland Elec. Hlum. Co., 119 Ohio St.3d 301, 2008-Ohio-3917, 893 N.E.2d 824, { 12. If the answer to either of the two Allstate prongs is in the negative, the PUCO does not have exclusive jurisdiction over the matter. /d. at { 13. % % * The PUCO’s expertise will be necessary to interpret the PUCO’s own order as a whole, as such interpretation requires an understanding of statutes that are exclusively within the PUCO’s purview, and further requires an understanding of the PUCO’s own goals in reaching its decision in 1996. The circumstances in this matter therefore satisfy the first prong of the Ad/state test. % % * The acts complained of in Suburban’s complaint involve Columbia’s failure to go through a specific process of interconnection of gas pipelines as provided in an order of the PUCO. The interconnection process requires the consent and approval of the PUCO. R.C. 4905.48. This matter therefore involves a practice that is normally undertaken by a utility company, regulated by the PUCO, and which was explicitly governed by the PUCO’s 1996 order. The circumstances in this matter satisfy the second prong of the Al/state test. Given the foregoing, the answer to both prongs of the Allstate test is in the affirmative. Suburban’s claims are within the exclusive jurisdiction of the PUCO. Judgment Entry, pp. 3-5; see also Columbia Gas’ October 13, 2017 Letter. In its Judgment Entry, this Court also stated that it would not consider Columbia Gas’ request for attorney fees absent a separate motion and memorandum in support. See Judgment Entry, p. 5. Accordingly, Columbia Gas now files the instant Motion for Attorney Fees and Memorandum in Support. Il. LAW AND ARGUMENT A. Standard for Attorney Fees Pursuant to R.C, 2323.51 Pursuant to R.C. 2323.51, frivolous conduct means any of the following: {7244600:4 } 8(i) Conduct that obviously serves merely to harass or maliciously injure another party to the civil action or appeal or is for another improper purpose, including, but not limited to, causing unnecessary delay or a needless increase in the cost of litigation. (ii) Conduct that is not warranted under existing law, cannot be supported by a good faith argument for an extension, modification, or reversal of existing law, or cannot be supported by a good faith argument for the establishment of new law. (ii) Conduct consisting of allegations or other factual contentions that have no evidentiary support or, if specifically so identified, are not likely to have evidentiary support after a reasonable opportunity for further investigation or discovery. R.C. 2323.51(A)(2)(a)(i)-(iii). Ohio Revised Code Section 2323.51 applies broadly to all conduct and imposes an objective standard for reviewing such conduct. See Murman v. University Hospitals Health Systems, Inc., 8th Dist. Cuyahoga No. 104726, 2017-Ohio-540, {21 (‘Compared to the subjective standard applied under Civ.R. 11, sanctions under R.C. 2323.51 can be imposed under the less restrictive ‘objective’ standard to view the conduct of the sanctioned person — rather than focus on what the person subject to sanctions actually thought, an objective standard is essentially one that looks to what the reasonable person would have thought”), citing Harris v. Rossi, 11th Dist. Trumbull No. 2016-T-0014, 2016-Ohio-7163. Willfulness is not a prerequisite to awarding attorney fees under R.C. 2323.51. See Ceol v. Zion Indus., Inc., 81 Ohio App.3d 289, 291, 610 N.E.2d 1076 (9th Dist. 1992). Because ““willfulness’ is not a prerequisite for relief, analysis of a claim under [R.C. 2323.51] boils down to a determination of (1) whether an action taken by the party to be sanctioned constitutes “frivolous conduct,’ and (2) what amount, if any, of reasonable attorney fees necessitated by the frivolous conduct is to be awarded to the aggrieved party.” Jd. (reversing the trial court’s denial of attorney fees under R.C. 2323.51 and holding that “conduct which ‘is not warranted under existing law’ is frivolous * * *” and that “misinterpreting the state of the law” is not a valid {7244600:4 } 9defense under R.C. 2323.51), citing Grimes v. Boebinger Agency, Inc., 5th Dist. Stark No. CA- 8417, 1991 WL 122345, *5-7 (June 25, 1991). An appellate court will not reverse a trial court’s award of attorney fees under R.C. 2323.51 absent an abuse of discretion. See Crockett v. Crockett, 10th Dist. Franklin No. 02AP-482, 2003-Ohio-585. This Court may award attorney fees under R.C. 2323.51 only after conducting a hearing in accordance with R.C. 2323.51(B)(2)(a)-(c). Ohio Revised Code Section 2323.5 1(B)(4) further provides that “[a]n award made pursuant to division (B)(1) of this section may be made against a party, the party’s counsel of record, or both.” In this case, Columbia Gas seeks to recover its attorney fees from Suburban only. B. Suburban’s Entire Lawsuit Constitutes Frivolous Conduct Under R.C. 2323.51 Ohio Revised Code Section 2323.51(B)(1) provides, in pertinent part, that “at any time not more than thirty days after the entry of final judgment in a civil action or appeal, any party adversely affected by frivolous conduct may file a motion for an award of court costs, reasonable attorney’s fees, and other reasonable expenses incurred in connection with the civil action or appeal.” By failing to conduct a reasonable inquiry into the facts and law allegedly supporting Suburban’s claims and by refusing to voluntarily dismiss its Complaint without prejudice after Columbia Gas advised Suburban that this Court lacks subject matter jurisdiction, Suburban engaged in frivolous conduct under R.C. 2323.51 and forced Columbia Gas to incur unnecessary attorney fees in this case. Suburban’s frivolous conduct is exacerbated by Suburban’s own repeated and contradictory admissions concerning the PUCO’s subject matter jurisdiction over the Stipulation and PUCO Order. Columbia Gas therefore is entitled to recover its attorney fees from Suburban in this case. {7244600:4 } 10The Supreme Court of Ohio has made clear that a party engages in frivolous conduct by pursuing a claim when “reasonable inquiry by a party’s counsel of record should reveal the inadequacy of a claim * * *.” Ron Scheiderer & Associates v. City of London, 81 Ohio St.3d 94, 97-98, 689 N.E.2d 552, 1998-Ohio-453; see also Lewis v. Celina Fin. Corp., 101 Ohio App.3d 464, 473, 655 N.E.2d 1333 (3d Dist. 1995) (failure to properly investigate claims prior to filing such claims constitutes frivolous conduct under R.C. 2323.51); Jefferson v. Creveling, 9th Dist. Summit No. 24206, 2009-Ohio-1214, {16 (affirming award of attorney fees and recognizing that “fajn attorney’s ignorance of the law or failure to investigate the law is not deemed objectively reasonable”); All Climate Heating and Cooling v. Zee Properties, Inc., 10th Dist. Franklin No. OLAP-784, 2002 WL 722968, *3 (Apr. 25, 2002) (affirming trial court’s finding that attorney fees were warranted where plaintiffs either had facts, ignored facts, or refused to investigate facts the majority of which, if not all of which, were in possession of plaintiffs or otherwise easily available to them). In this case, Suburban’s Complaint indisputably centers upon the Stipulation and PUCO Order. Ohio Revised Code Section 4903.12 states: “No court other than the supreme court shall have power to review, suspend, or delay any order made by the public utilities commission, or enjoin, restrain, or interfere with the commission or any public utilities commissioner in the performance of official duties.” R.C. 4903.12; see also Columbia Gas’ October 13, 2017 Letter, p. 2; Judgment Entry, p. 3. The PUCO alone, subject to review solely by the Supreme Court of Ohio, therefore has the power to review, interpret, and enforce its PUCO Order adopting and approving the Stipulation at issue in this case. Moreover, Suburban’s claims regarding the Stipulation and PUCO Order indisputably involved public utility rate and service matters that fall within the Commission’s exclusive {7244600:4 } 11jurisdiction. See State ex rel. Illum. Co. v. Cuyahoga Cty. Court of Common Pleas, 97 Ohio St.3d 69, 72 (2002) (‘The [C]ommission has exclusive jurisdiction over various matters involving public utilities, such as rates and charges, classifications, and service, effectively denying to all Ohio courts (except [the Supreme Court of Ohio]) any jurisdiction over such matters.”), quoting State ex rel. Cleveland Elec. Hlum. Co. v. Cuyahoga Cty. Court of Common Pleas, 88 Ohio St.3d 447, 450 (2000); see also Columbia Gas’ October 13, 2017 Letter, p. 3; Judgment Entry, p. 3. Because both prongs of the Al/state test are satisfied in the affirmative, the PUCO -— not the Delaware County Court of Common Pleas — possesses exclusive jurisdiction over Suburban’s claims against Columbia Gas. See Columbia Gas’ October 13, 2017 Letter, p. 3; see also Judgment Entry, pp. 4-5. Suburban knew all of this to be true when it filed its Complaint against Columbia Gas in this case. Suburban’s frivolous conduct is evidenced by Suburban’s own admissions and filings. The Stipulation and PUCO Order provide that “the Commission shall retain continuing jurisdiction in this matter to supervise and assure the Parties’ compliance with [the Stipulation].” See Stipulation, Section C, ¥5; see also PUCO Order, p. 6. Relying upon such language, Suburban on at least three separate occasions has initiated proceedings against Columbia Gas before the PUCO — not a court of common pleas — alleging that Columbia Gas had violated the Stipulation and PUCO Order, requesting the PUCO to enforce the Stipulation and PUCO Order against Columbia Gas, and specifically invoking the PUCO’s jurisdiction over the Stipulation and PUCO Order. See Suburban’s PUCO Complaint, 2007 Motion to Enforce, and 2013 Motion to Enforce; see also Mr. Pemberton, Sr.’s Pre-Filed Direct Testimony, p. 20. In fact, Suburban’s 2013 Motion to Enforce centered upon Section A, Paragraph 10 of the Stipulation — the exact same provision at issue in Suburban’s Complaint in this case. {7244600:4 } 12Ignoring unambiguous Ohio law and its own repeated admissions and filings concerning the PUCO’s subject matter jurisdiction over the Stipulation and PUCO Order, Suburban filed its Complaint against Columbia Gas in the Delaware County Court of Common Pleas. In an attempt to avoid unnecessary time and expense by the parties and also preserve judicial resources, Columbia Gas requested that Suburban voluntarily dismiss its Complaint without prejudice as a result of this Court’s lack of subject matter jurisdiction. Suburban glibly rejected Columbia Gas’ request, thereby forcing Columbia Gas to obtain a court-ordered dismissal of Suburban’s Complaint. Ohio courts routinely hold that a party engages in frivolous conduct when that party learns that claims are unwarranted under law but continues to pursue such claims. See Taylor v. Franklin Blvd. Nursing Homes, Inc., 112 Ohio App.3d 27, 31-32, 677 N.E.2d 1212 (8th Dist. 1996) (an award of sanctions is proper where plaintiffs counsel pursued claims against defendant despite the fact that the merits of the lawsuit disappeared after filing); Masturzo v. Revere Rd. Synagogue, 98 Ohio App.3d 347, 353, 648 N.E.2d 585 (9th Dist. 1994) (finding of frivolous conduct affirmed where plaintiff failed to dismiss lawsuit against defendant in timely fashion after learning claims lacked merit); Bikkani v. Lee, 8th Dist. Cuyahoga No. 89312, 2008- Ohio-3130 (reversing trial court’s denial of attorney fees where party subjected to frivolous filing sent a letter to the opposing party requesting voluntary dismissal shortly after complaint was filed, but the party that filed frivolous claims refused to dismiss the complaint). Despite the fact that Suburban clearly knew that this Court lacks subject matter jurisdiction over its claims (evidenced by its PUCO admissions and filings concerning the exact same Stipulation and PUCO Order), Suburban frivolously commenced this lawsuit in the Delaware County Court of Common Pleas and continued to pursue its unwarranted claims even {7244600:4 } 13after receipt of Columbia Gas’ October 13, 2017 Letter. In fact, on October 20, 2017, just one week after receipt of Columbia Gas’ letter demonstrating this Court’s lack of subject matter jurisdiction, Suburban doubled down on its frivolous conduct by filing its PUCO Complaint against Columbia Gas in which it affirmatively pleads that the PUCO has subject matter jurisdiction over claims centering upon the exact same Stipulation and PUCO Order. See Suburban’s PUCO Complaint, pp. 2, 4. Suburban has engaged in the type of frivolous conduct that warrants an award of attorney fees under R.C. 2323.51. Columbia Gas was required to expend significant time and resources to obtain a court-ordered dismissal of Suburban’s Complaint, which, put simply, never should have been filed in the first place. To deter such meritless litigation tactics, this Court should award Columbia Gas its attorney fees from Suburban pursuant to R.C. 2323.51. Cc This Court Should Award Columbia Gas Its Attorney Fees Ohio Revised Code Section 2323.51(B)(5)(a) provides, in pertinent part, that: [Elach party who may be awarded reasonable attorney’s fees and the party’s counsel of record may submit to the court or be ordered by the court to submit to it, for consideration in determining the amount of reasonable attorney’s fees, an itemized list or other evidence of the legal services rendered, the time expended in rendering the services, and * * * the attorney’s fees associated with those services. R.C. 2323.51(B)(5)(a)(ii). When determining the amount of attorney fees, “a trial court is guided by a two-step determination. The trial court first calculates the ‘lodestar’ by multiplying the number of hours reasonably expended by a reasonable hourly rate, and, second decides whether to adjust that amount based on the reasonableness factors listed in Prof.Cond.R. 1.5(a).” Cruz v. English Nanny & Governess School Inc., 8th Dist. Cuyahoga No. 103714, 2017-Ohio- 4176, 797, citing Bittner v. Tri-County Toyota, Inc., 58 Ohio St.3d 143, 569 N.E.2d 464, syllabus (1991) (applying the predecessor to Prof.Cond.R. 1.5(a)). The factors set forth under {7244600:4 } 14Prof.Cond.R. 1.5(a) to be considered in determining reasonableness are: (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly; (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and (8) whether the fee is fixed or contingent. The Supreme Court of Ohio has held that an award of attorney fees made by a court pursuant to R.C. 2323.51 “may include fees incurred in prosecuting a motion for sanctions.” City of London, 81 Ohio St.3d 94, syllabus; see also Ferron v. Video Professor, Inc., 5th Dist. Delaware, 2009-Ohio-3133, {111 (affirming trial court’s award of attorney fees incurred in the prosecution of a motion for sanctions because such “attorney fees would logically include fees incurred at the actual hearing on the motion for sanctions.”). Notwithstanding this fact, Columbia Gas is not seeking to recover its attorney fees incurred in conjunction with the filing and prosecution of the instant Motion for Attorney Fees. Columbia Gas instead only seeks to recover its attorney fees incurred through February 8, 2018, the date of receipt of this Court’s February 5, 2018 Judgment Entry dismissing Suburban’s Complaint for lack of subject matter jurisdiction. From the filing of Suburban’s frivolous lawsuit through February 8, 2018, Columbia Gas incurred attorney fees in the total amount of $87,436.50, broken down as follows: {7244600:4 } 15Attorney Name Hourly Rate’ Total Hours Total Fees Matthew R. Rechner $390.00 122.50 $47,775.00 Adam C. Smith $230.00 157.70 $36,271.00 William Beckley $225.00 11.10 $2,497.50 Erin W. Cicarella $235.00 3.80 $893.00 See Affidavit of Stephen Kandra III in Support of Motion of Defendant Columbia Gas of Ohio, Inc. for Attorney Fees Pursuant to R.C. 2323.51 (“Kandra Affidavit”) attached hereto as Exhibit C. 15; see Exhibit 1 attached to Kandra Affidavit; see also State ex rel. Pietrangelo v. Avon Lake, 146 Ohio St.3d 292, 294, 55 N.E.3d 1091, 2016-Ohio-2974 (recognizing that “narrative portions of itemized attorney-fee billing statements containing descriptions of legal services performed by counsel are protected by attorney-client privilege’) (citations omitted). The itemized time entries attached to the Kandra Affidavit as Exhibit 1 provide “sufficient detail and probative value to enable the court to determine with a high degree of certainty that such hours were actually and reasonably expended in the prosecution of the litigation.” See Penn, LLC v. Prosper Business Development Corp., S.D.Ohio No. 2:10-cv-993, 2012 WL 3583258, *13 (Aug. 20, 2012); see also Wehr v. Petraglia, 7th Dist. Columbiana No. 14 CO 7, 2016-Ohio-3126, 4441-42. Nevertheless, Columbia Gas will provide the Court with unredacted, itemized time entries for in camera review and/or subject to an appropriate protective order should the Court require additional detail associated with the time entries of Columbia Gas’ attorneys. William H. Falin, Esq., an attorney at the law firm of Moscarino & Treu LLP in Cleveland, Ohio, has reviewed the itemized time entries for Mr. Rechner, Mr. Smith, Ms. Cicarella, and Mr. Beckley attached as Exhibit 1 to the Kandra Affidavit. See Affidavit of William H. Falin, Esq. Regarding Reasonableness of Attorney Fees of Defendant Columbia Gas 7 Mr. Rechner’s current standard hourly rate is $465.00, Mr. Smith’s current standard hourly rate is $275.00, Ms. Cicarella’s current standard hourly rate is $380.00, and Mr. Beckley’s current standard hourly rate is $265.00. See Kandra Affidavit, 94. {7244600:4 } 16of Ohio, Inc. (‘“Falin Affidavit”), 4 (attached hereto as Exhibit D). It is the opinion of Mr. Falin that the hourly rates charged by McDonald Hopkins in this action are within the range of rates reasonably and customarily charged for litigation services. See id., J5. In finding that the hourly rates charged and number of hours expended by McDonald Hopkins are reasonable, Mr. Falin considered the “lodestar” factors set forth under Prof.Cond.R. 1.5(a). See id., [6. It also is the opinion of Mr. Falin that the time and labor expended by McDonald Hopkins were reasonable and customary and that such time and labor were associated with obtaining a court-ordered dismissal of Suburban’s Complaint. See id. Mr. Falin’s opinions are based upon his personal knowledge, training, and experience as a practicing attorney and his review of the case as set forth above. See id. Tl. CONCLUSION Based upon the foregoing and Suburban’s frivolous conduct in this action, Columbia Gas respectfully requests that this Court, after conducting a hearing pursuant to R.C. 2323.5 1(B)(2)(a)-(c), enter an Order awarding Columbia Gas its attorney fees in the amount of $87.4306.50 from Suburban pursuant to R.C. 2323.51. {7244600:4 } 17{7244600:4 } Respectfully submitted, s/ Matthew R. Rechner MATTHEW R. RECHNER (0074446) ADAM C. SMITH (0087720) McDonald Hopkins LLC 600 Superior Avenue East, Suite 2100 Cleveland, Ohio 44114-2653 Telephone: (216) 348-5400 Facsimile: (216) 348-5474 i @modonaldhopkia ANTHONY M. HEALD (0002095) Heald Law 125 North Sandusky Street Delaware, Ohio 43015 Telephone: — (740) 363-1369 Facsimile: (740) 369-1616 Email: tonybeatl @ A Counsel for Defendant Columbia Gas of Ohio, Inc. 18CERTIFICATE OF SERVICE A copy of the foregoing Motion of Defendant Columbia Gas of Ohio, Inc. for Attorney Fees Pursuant to R.C. 2323.51 was served via electronic mail on March 7, 2018 upon: Stephen D. Martin, Esq. Manos, Martin & Pergram Co., LPA 50 North Sandusky Street Delaware, Ohio 43015 Mark A. Whitt, Esq. Whitt Sturtevant LLP KeyBank Building 88 E. Broad Street, Suite 1590 Counsel for Plaintiff Suburban Natural Gas Company s/ Matthew R. Rechner MATTHEW R. RECHNER (0074446) ADAM C. SMITH (0087720) McDonald Hopkins LLC ANTHONY M. HEALD (0002095) Heald Law Counsel for Defendant Columbia Gas of Ohio, Inc. 472446004 } 19EXHIBIT AMcDonald . —_—_—_— Hopki ns McDonald Hopkins LLC 600 Superior Avenue, East A business advisory and advocacy faw firm® Suite 2100 Cleveland, OH 44114 Direct Dial; 216-348-5826, P 1.216.348.5400 E-mail: mrechner@mcdonaldhopkins,com F 1.216.348,5474 October 13, 2017 VIA ELECTRONIC MAIL AND REGULAR U.S. MAIL Stephen D. Martin, Esq. (smartin@mmpdlaw.com) Manos, Martin & Pergram Co., LPA 50 North Sandusky Street Delaware, Ohio 43015 Mark A. Whitt, Esq. (whitt@whitt-sturtevant.com’ Whitt Sturtevant LLP KeyBank Building 88 East Broad Street, Suite 1590 Columbus, Ohio 43215 Re: Suburban Natural Gas Company v. Columbia Gas of Ohio, Inc. Delaware County Court of Common Pleas Case No. 17-CVH-100585 Dear Counsel: As you know, this law firm represents Defendant Columbia Gas of Ohio, Inc. (“Columbia Gas”) in connection with the above-captioned action. We have reviewed the Complaint filed by Plaintiff Suburban Natural Gas Company (“Suburban”) in this action. As set forth below, the Delaware County Court of Common Pleas lacks subject matter jurisdiction because exclusive jurisdiction over this matter lies solely with the Public Utilities Commission of Ohio (the “Commission”). Columbia Gas therefore requests that Suburban immediately dismiss, without prejudice, its Complaint filed in the Delaware County Court of Common Pleas. Without addressing the merits (or lack thereof) of your client’s claims, Suburban’s Complaint centers upon: (1) a Sccond Amended Joint Petition, Application, and Stipulation and Recommendation (the “Stipulation”), jointly filed by Suburban and Columbia Gas on November 9, 1995 in PUCO Case Nos, 93-1569-GA-SLF, 93-938-GA-ATR, and 94-939-GA-ATA (attached as Exhibit A to Suburban’s Complaint); and 47014283:3} Chicago | Cleveland | Columbus { Detroit | Miami | West Palm Beach www.medonaldhopkins.com(2) the Commission’s Finding and Order (the “Commission Order”), entered on January 18, 1996 in the above-referenced PUCO proceedings, adopting and approving the Stipulation and ordering Suburban and Columbia Gas to comply with its directives (attached as Exhibit B to Suburban’s Complaint). The jurisdictional terms of the Stipulation and Commission Order are expressly clear: “The Com: ion shall retain continuing jurisdiction in this matter to superyise and assure the Parties’ compliance with this Joint Stipulation and Recommendation of the Parties.” See Stipulation, Section C, §§ (emphasis added); see also Commission Order, p. 6 (ordering that the Stipulation is approved and adopted). If Suburban contends, as it does in its Complaint, that Columbia Gas allegedly has failed to comply with certain obligations purportedly owed to Suburban pursuant to the Stipulation and Commission Order, the Commission — not the Delaware County Court of Common Pleas — has “continuing jurisdiction...to supervise and assure the [p]arties’ compliance” with the Stipulation and Commission Order. See id. Notwithstanding the parties’ express consent and the Commission Order regarding the Commission’s continuing jurisdiction over this matter, Ohio law is clear that the Comimission has sole and exclusive jurisdiction over dispules centering upon its own orders. Ohio Revised Code 4903.12 states: “No court other than the supreme court shall have power to review, suspend, or delay any order made by the public utilities commission, or enjoin, restrain, or interfere with the commission or any public utilities commissioner in the performance of official duties.” O.R.C, 4903.12, The Commission alone, subject to review solely by the Supreme Court of Ohio, has the power to review, interpret, and enforce its own orders, including the Commission Order adopting and approving the Stipulation and ordering Suburban and Columbia Gas to comply with ils directives.. Any exercise of jurisdiction by the Delaware County Court of Common Pleas over this matter, according to the Supreme Court of Ohio, would constitute an “usurpation of [the Commission’s] authority.” See e.g., State ex rel. Columbus Southern Power Co. v. Fais, 117 Ohio St.3d 340 (2008), citing State ex rel. N. Ohia Tel. Co. y. Winter, 23 Ohio St.2d 6 (1970). Lastly, the Delaware County Court of Common Pleas lacks subject matter jurisdiction over Suburban’s claims against Columbia Gas because they indisputably involve natural gas public utility rate and service matters that fall within the Cammission’s exclusive jurisdiction. Suburban claims that Columbia Gas is required to allow Suburban to interconnect to Columbia Gas’ Northern Loop pipeline to supply additional natural gas into Suburban’s distribution system ' Commission approval of the Stipulation in the above-referenced PUCO proceedings was required before its terms became binding upon the parties. Ohio Revised Code 4905.48 states, in relevant part: “With the consent and approval of the public utilities comm mn: (A) Any two or more public utilities furnishing a like service or product and doing business in the same municipal corporation or locality within this state, or any two or more public utilities whose lines intersect or parallel each other within this state, may enter into contracts with each other that will enable ihem to operate their lines or plants in connection with each other.” O.R.C. 4905.48; see also Stipulation, Section A, 41 (“The Partics are willing to enter into an agreement as set forth herein to transfer certain customers and facilities located in the Countics of Franklin and Delaware, State of Ohio, subject to the active supervision, direction, and consent and approval of the Commission pursuant to R.C. § 4905.48.”); Stipulation, Section C, (3 (IP the Commission rejects any part or all of this Stipulation, the Parties agree that the Stipulation shall be null and void and will be withdrawn, and shall not constitute any part of the record in this proceeding, nor shall it be used for any purpose whatsoever by any party to this or any other proceeding.”). 2 McPonalal iopkins A business advisory and advaceicy low firm* €7014253:3}and that Columbia Gas’ alleged violation of the Stipulation and Commission Order is diminishing and threatening Suburban’s ability to supply and service its customers in Delaware County, Ohio. See Complaint, Preamble and §91, 6, 7, 9, 13, 14, 15, 16, 17, 18, 22, 23, 27. In support of its claims, Suburban quotes and relies upon Section A, Paragraph 10 of the Stipulation, which states: Nothing in this Stipulation shall be construed as preventing Columbia [Gas] from installing, in any of the areas described, a high-pressure natural gas pipeline, the purpose of which is to be limited to transporting gas from existing and future sources of supply to various gas distribution systems owned and operated by Columbia [Gas] in southern Delaware and northern Franklin Counties to points outside of said areas, which pipeline shall also be available, subject _to appropriate rate_and service conditions, as a supply source for Suburban’s system. Complaint, §13 (emphasis added). Suburban further contends that this above language “was (and is) an essential term of the Stipulation.” /d., (14. “The [C]ommission has exclusive jurisdiction over various matiers involving public utilities, such as rates and charges, classifications, and service, effectively denying to all Ohio courts (except this court [the Supreme Court of Ohio]) any jurisdiction over such matters.” Srate ex rel. illum. Co. v. Cuyahoga Cty. Court of Common Pleas, 97 Obio St.3d 69, 72 (2002), quoting State ex rel. Cleveland Elec, lum. Co. v. Cuyahoga Cty. Court of Common Pleas, 88 Ohio St.3d 447, 450 (2000). Suburban’s claims, on their face, involve natural gas public utility rate and service issues. Suburban alleges that Columbia Gas is required to allow Suburban to interconnect to Columbia Gas’ Northern Loop pipcline pursuant to the Stipulation and Commission Order and secks specific performance from Columbia Gas in order for Suburban to continue to supply and service its customers in Delaware County, Ohio. However, and again without addressing the merits (or lack thereof) of Suburban’s claims, the relief sought by Suburban would be “subject to appropriate rate and service conditions.” See Stipulation, Section A, 410; see also Commission Order, p. 6. The Commission indisputably has exclusive jurisdiction regarding the determination of “appropriate rate and service conditions” for natural gas public utilities. Suburban’s claims also relate to normally authorized practices of a natural gas public utility (ie., a natural gas public utility’s interconnection to another natural gas public utility’s pipelines) and require the Commission’s expertise to resolve the parties’ dispute (Z.e., whether Columbia Gas is required to allow Suburban to interconnect to Columbia Gas’ Northern Loop pipeline and whether Columbia Gas purportedly has failed to comply with the Stipulation and Commission Order). See DiFranco y. FirstEnergy Corp., 134 Ohio St.3d 144, 150 (2012), citing Allstate Ins. Co. v. Cleveland Elec. Mlum. Co., 119 Ohio St.3d 301 (2008). It is indisputable that the Commission’s involvement and expertise are necessary since it “actively supervised” the parties’ resolution of the prior PUCO proceedings, which resulted in the Stipulation and Commission Order at issue in this case, See Stipulation, p. 2. Additionally, as set forth above, the Commission’s expertise also is required for Suburban to obtain the relief it seeks (i¢., interconnection to Columbia Gas’ Northern Loop pipeline) because such requested relief would McDonald . {7014253:3} 3 ne HOD KING A business advisory and advocacy law firm?be “subject to appropriate rate and service conditions.” See Stipulation, Section A, 10; see also Commission Order, p. 6. Such natural gas public utility rate and service conditions are not independent contractual matters that may be adjudicated by a common pleas court. Accordingly, for the reasons set forth above, the Commission — not the Delaware County Court of Common Pleas — possesses exclusive jurisdiction over Suburban’s claims against Columbia Gas. Columbia Gas therefore requests that Suburban voluntarily dismiss, without prejudice, its Complaint against Columbia Gas on or before Thursday, October 19, 2017. If Suburban does not voluntarily dismiss its Complaint and Columbia Gas is required to move for dismissal based upon lack of subject matter jurisdiction, please be advised that Columbia Gas also will seck to recover its associated attorney fees and costs pursuant to Rule 11 of the Ohio Rules of Civil Procedure and R.C, 2323.51 as a result of Suburban’s improperly fited Complaint in this action. Sincerely, Mask Rj Matthew R. Rechner MRR/Ik ce: Adam C. Smith, Esq. (via email) McDonald . (7014253:3} 4 a Hopkins A business advinciy and advocacy kaw ficr®EXHIBIT BFrom: Mark Whitt Sent: Monday, October 16, 2017 5:50 PM To: Rechner, Matthew; Stephen D. Martin (smartin@mmpdlaw.com) Ce: Smith, Adam Subject: Re: Suburban Natural Gas Company v. Columbia Gas of Ohio, Inc.; Delaware County Court of Common Pleas; Case No. 17-CVH-100585 Mr. Rechner — We have your letter threatening to pursue sanctions if Suburban Natural Gas Co. does not dismiss the referenced case. As one of the lawyers who litigated several of the cases you cite, you may rest assured that we carefully considered the jurisdictional issue before filing the complaint. If you wish to file a motion to dismiss, that is your prerogative. We do not believe it would productive to debate the jurisdictional issue with you via letter or email. Mark A. Whitt whitt The KeyBank Building 88 E. Broad Street, Suite 1590 Columbus, Ohio 43215 614.224.3911 (direct) 614.804.6034 (mobile) whilt@whitt-stertevantcont From: Matthew Rechner Date: Friday, October 13, 2017 at 3:34 PM To: "Stephen D. Martin (sraartin@mmodiaw.cam)" , Mark Whitt Ce: "Smith, Adam" Subject: Suburban Natural Gas Company v. Columbia Gas of Ohio, Inc.; Delaware County Court of Common Pleas; Case No. 17-CVH-100585, Counsel — Please see the attached correspondence in connection with the above-captioned action. Regards, Matt Rechner Matthew R. Rechner Reeetiar T: 216.348.5826 600 Superior Avenue East F: 216.348.5474 Suite 2100 mrechner@mcdonaldhopkins.com Cleveland, OH 44114 Wwww.mcdonaldhopkins.comEXHIBIT CIN THE COURT OF COMMON PLEAS DELAWARE COUNTY, OHIO SUBURBAN NATURAL GAS COMPANY, CASE NO, 17-CVH-100585 Plaintiff, JUDGE EVERETT H. KRUEGER TLIN SUPPORT OF MOTION OF DEFENDANT COLUMBIA GAS OF OHIO, INC. FOR ATTORNEY FEES ) ) ) ) AFFIDAVIT OF STEPTIEN KANDRA ) COLUMBIA GAS OF OHIO, INC., ) ) ) ) Defendant. PURSUANT TO R.C. 2323.51 STATE OF OHIO ) ) SS: COUNTY OF CUYAHOGA ) Stephen Kandra III, being first duly sworn, deposes and says: 1. 1 am an active certified public accountant and employed as the Controller for McDonald Hopkins LLC (“McDonald Hopkins”). 2. As the Controller for McDonald Hopkins, 1 am responsible for the day-to-day activities of McDonald Hopkins’ Accounting Department. McDonald Hopkins’ Accounting Department is responsible for numerous accounting-rclated activities, including, but not limited to, issuing invoices to clients, receiving payment from clients, tracking accounts receivable, and providing monthly financial reporting statistics. 3. As Controller for McDonald Hopkins, I am familiar with details concerning the issuance of invoices to clients, including the invoices (the “Invoiccs”) issued to Defendant Columbia Gas of Ohio, Inc. (“Columbia Gas”) for work performed by McDonald Hopkins on behalf of Columbia Gas relative to this lawsuit from October 5, 2017 through February 8, 2018 as set forth in redacted, itemized time entries (the “Redacted, Itemized Time Entries”). True and {7252956:3 }accurate copies of the Invoices and Redacted, Itemized Time Entries are attached hereto as Exhibit 1. 4, The current standard hourly rate for Matthew R. Rechner, Esq. is $465.00, for Adan C. Smith, Esq. is $275.00, for William Beckley, Esq. is $265.00, and for Erin Cicarella, Esq. is $380.00. 5. As set forth in the Redacted, Itemized Time Entries, the current hourly rate charged to Columbia Gas by McDonald Hopkins for legal services provided by Matthew R. Rechner, Esq. is $390.00, for Adam C. Smith, Esq. is $230.00, for William Beckley, Esq. is $225.00, and for Erin Cicarella, Esq. is $235.00. See Exhibit 1. 6. The November 17, 2017 invoice was issued regarding work performed by McDonald Hopkins on behalf of Columbia Gas from October 5, 2017 through October 31, 2017. See Exhibit 1. The total amount billed to Columbia Gas for such work was $49,557.50. Jd. Columbia Gas paid McDonald Hopkins $49,557.50. 7. The December 12, 2017 invoice was issued regarding work performed by McDonald Hopkins on behalf of Columbia Gas from November 1, 2017 through November 30, 2017. See Exhibit 1. The total amount billed to Columbia Gas for such work was $24,878.00. Jd. Columbia Gas paid McDonald Hopkins $24,878.00. 8. ‘The January 17, 2018 invoice was issued regarding work performed by McDonald Llopkins on behalf of Columbia Gas from December 1, 2017 through December 31, 2017. See Exhibit 1. The total amount billed to Columbia Gas for such work was $10,685.00. Jd. Columbia Gas paid McDonald Hopkins $10,685.00. 9. The February 16, 2018 invoice was issued regarding work performed by McDonald Hopkins on behalf of Columbia Gas from January 1, 2018 through January 31, 2018. {7252956:3 } 2See Exhibit 1. The total amount billed to Columbia Gas for such work was $858.00. Id. Columbia Gas paid McDonald Hopkins $858.00. 10. The March 2, 2018 invoice was issued regarding work performed by McDonald Hopkins on behalf of Columbia Gas from February 1, 2018 through February 8, 2018. See Exhibit 1. The total amount billed to Columbia Gas for such work was $1,458.00. id. FURTHER, AFFIANT SAYETH NOT. Se ; STEPHEN KANDRAS ih SWORN TO AND SUBSCRIBED in my presence this Fag day of March 2018. JOSEPH M. MUSKA Attorney Al Law NOTARY PUB