ANALYSIS OF JULY 15, 2021 SUPREME COURT OPINIONS

(Posted July 15, 2021) The Supreme Court of Virginia hands down three published opinions this morning. Two of those involve the Commonwealth’s dominant provider of electric power, Virginia Electric and Power Company.

Service of process

The primary issue in Evans v. Evans is service of process under Virginia’s longarm jurisdiction statute. It’s a suit challenging a final divorce decree on the grounds that the divorce court didn’t acquire personal jurisdiction over the husband.

The spouses married near the turn of the millennium and lived together here in Virginia Beach for five years before separating. The next year, they executed a property settlement agreement that obligated the husband to pay $1,000 per month in child support starting in July 2005.

The wife moved to Martinsville during their separation, and eventually sued for divorce there. Her complaint stated that she last had contact with him about a month earlier, and stated that his last known residence was in Virginia Beach. She attached an affidavit asserting that the husband couldn’t be found despite due diligence. In a later deposition, she explained the diligence that she had used: She called his family members.

The clerk of court in Henry County issued an order of publication that ran for four weeks in the newspaper there. The husband didn’t appear in response to the publication, so the Henry County Circuit Court shortly thereafter entered a final decree of divorce in which it ratified and confirmed the PSA and incorporated it into the March 2006 final decree.

Time passed; a lot of it. In 2019, the husband went to Henry County and moved the court to reopen the case. He asserted that the court hadn’t validly obtained personal jurisdiction over him, so the support order was void.

The issue here is whether this was an appropriate use of the longarm jurisdiction statute. For those of you who endured Civil Procedure in law school, your first thought must be that this procedure only governs suits against nonresidents. But a line of caselaw indicates that it can apply to Virginians, too.

The circuit court considered the matter and agreed with the husband. On appeal, the Court of Appeals agreed, but the justices decided to review the question.

The Supreme Court’s docket comprises two kinds of cases: We call them error correction and law development. The latter category includes appeals that raise previously undecided issues of significance to the field of law. In my judgment, the SCV writ panel took this case for that reason. Justice Kelsey’s opinion for a unanimous Supreme Court fully agrees with the underlying judgment, and explores why this form of substituted service won’t do in a case like this.

First, please understand that a circuit court can enter a divorce decree, one that dissolves the bonds of matrimony, without acquiring personal jurisdiction over a defendant. Dissolving a marriage is an in rem proceeding. But an award of support is in personam; for that, you have to tag the defendant somehow with process.

The court notes today that in the spectrum of process service, an order of publication is the least satisfying, the “lowest quality of notice.” The court rules today that it’s usable only as a tertiary approach. The first and best method is by personal service; the second is substituted service, such as by delivery to a family member or by posting at the defendant’s home. Here, the wife went straight to the least effective means, and didn’t even list the parties’ marital home as a last-known address for the husband.

There’s some important language in today’s opinion that challenges the efficacy of service by publication unless “all other alternatives have been diligently exhausted.”

The wife had one arrow left in her quiver. She argued that by statute, a divorce court is empowered to incorporate PSAs, including support awards, into divorce decrees, even when service is by publication. This looks promising, but the argument dies at the hands of a familiar executioner. The wife hadn’t made this argument in circuit court or in the Court of Appeals, so the justices decline to consider it.

Finally, a closing footnote refuses the husband’s request for attorney’s fees, finding that “he has no just basis for seeking an award” of them. The footnote is very short and doesn’t go into detail. The only hint that we get is that the husband’s appellate counsel shares the same name as the husband; the husband’s name includes a “Jr.” It’s possible that the Robes decided not to award fees where the representation was within the family.

Torts

A short opinion from the chief justice decides Kinsey v. VEPCO, from the April session. This is a claim by a mother and daughter in Rockingham County, alleging that they suffered a number of debilitating personal injuries when VEPCO placed an experimental smart meter on their home. The description of their symptoms is alarming: major moods swings, hair loss, insomnia, an endocrine disorder, and even epilepsy, among other things.

The two eventually figured out that the utility had installed the meters without notice to them, and contacted VEPCO to seek their removal. The utility wouldn’t budge, insisting that the meters were safe. It eventually offered to move the meters to a pole several feet away from the home, adding the condition, “but you’ll have to pay for the move.”

VEPCO eventually offered customers the opportunity to opt out of the experimental program. The mother and daughter speedily took the utility up on that, but the utility still refused. It eventually replaced the meter with another one, which had its transmitter disabled.

The mother and daughter sued for damages; VEPCO demurred and filed a special plea, claiming federal preemption. After argument, the circuit court granted the plea and dismissed both lawsuits.

The Supreme Court affirms that ruling today. The court finds that FCC regulations cover this turf. The other and daughter argued that the original smart meters were defectively installed and operated, but the Supreme Court rules that that wasn’t the basis of their complaints. They instead alleged that the ordinary radio frequency emissions from the device caused their injuries. Since those emissions are governed by the FCC regs, this state tort claim is barred.

Utilities

Have you ever wanted to compete against one of the dominant electric-power providers in Virginia, VEPCO or Appalachian Power Company? The General Assembly is looking out for you. Despite the big companies’ huge head start and protected market position, you can offer competing services to customers. You just have to satisfy one little requirement: You have to offer 100% renewable-source energy.

A company called Constellation NewEnergy, Inc. decided to do just that. To generate the energy, it used something called a pumped storage hydroelectric facility. Today’s opinion in VEPCO v. State Corporation Commission describes what this setup entails: “a configuration of two water reservoirs at different elevations that can generate power (discharge) as water moves down through a turbine” and then “draws power as it pumps water (recharge) to the upper reservoir.”

It seems complex to me; but usually in these utility cases, there are a lot of zeroes, so I have no doubt that it made good economic sense for Constellation to do it. Having received some ominous throat-clearing noises from VEPCO about its setup, the company petitioned the SCC for a declaration that its process was indeed renewable energy.

To complicate matters, the 2020 General Assembly stepped in and amended its statutory definition of renewable energy. This amendment expressly excluded pumped storage hydroelectric facilities. VEPCO’s lawyers no doubt licked their metaphorical chops as the parties drew battle lines.

The SCC conducted a hearing and ruled that the Constellation generation was “derived from falling water” and thus met the pre-2020 statutory definition. It handed Constellation an even greater victory by ruling that the new definition wouldn’t apply to Constellation’s contracts entered into before the effective date of the amendment.

VEPCO did the natural, the commendable, thing by appealing. (We here at VANA always appreciate it when someone appeals.) In doing so, it didn’t have to run the writ-stage gantlet; SCC appeals are of right in the Supreme Court of Virginia. Today we get that rare treat, a divided opinion with a compelling dissent to challenge the majority.

Justice Chafin writes for three other justices in accepting the SCC’s rulings. The court finds that the plain meaning of “falling water” is good enough to decide the first issue in the case. There’s no obligation in the statute that the water has to be part of a normal watercourse – what you might think of when you envision a waterfall or water running through turbines in a dam.

The court then finds that where Constellation had entered into contracts before the effective date of the statute, the old definition should continue to govern. Holding otherwise would impair existing contract rights. For future contracts, Constellation has to arrange for a qualifying renewable-energy source; but for its preexisting contracts, it’s good to go with this facility.

Perhaps you’ve been reading along and nodding in agreement. If so, you need to heed the admonition that trial judges administer to jurors: Wait to hear both sides before you make up your mind.

Justice Kelsey writs today’s dissent on behalf of the chief justice and Justice McCullough. The dissent agrees about the first issue: Under the old statutory definition, the pumped storage hydroelectric facility meets the definition of renewable energy. But the dissent offers a decisively different take on the second question.

The dissent concludes that the prospective-only application of the statutory change applies to services provided after the July 1, 2020 effective date of the new act. That is, the new act has no effect on past sales, but governs all sales that occur thereafter.

Under this analysis, Constellation sells electricity to its customers on a monthly basis. The contract doesn’t contemplate an advance purchase, but ongoing monthly purchases of power. This is the way you pay your electric bill, right?

Every contract is subject to the possibility of future changes in law. No one can insulate himself from a change in law by contracting for the perpetual application of prior or existing law.

Turning to the impairment-of-contract issue, the dissent notes that it can still deliver electricity to its customers; the General Assembly “simply took one renewable-energy option off the table.” And when the legislature modifies a law like this, it uses the police power to do so, and every contract is subject to the exercise of that power.

The caption of this appeal might have portended a dry discussion of arcane principles of little interest to those outside the energy-regulation field. But it turns out to contain a spirited debate about the effect of statutory change.