Provider of telephone services to lower-income residents of state under a program administered by the California Public Utilities Commission (CPUC) filed first amended complaint against administrator, hired by CPUC to manage program enrollment, and its subcontractor, for negligence, intentional and negligent interference with prospective economic relations, violations of the Unfair Competition Law, quantum meruit, unjust enrichment, and related claims, claiming that they botched the rollout of a new software platform used to enroll people in the program, causing provider to lose millions of dollars.
The Superior Court sustained companies’ demurrers. Provider appealed.
The Court of Appeal held that:
- Trial court’s jurisdiction over provider’s action was not statutorily barred on basis that a decision by trial court in the action would be inconsistent with a CPUC order or decision;
- Trial court’s jurisdiction over provider’s action was not statutorily barred on basis that recovery in action would enjoin, restrain, or interfere with CPUC in the performance of its official duties; and
- Remand to trial court was warranted so that it could consider whether CPUC was an indispensable party to the action.
A trial court decision in action brought by provider of telephone services to lower-income residents of state, under a program administered by the California Public Utilities Commission (CPUC), against two companies, hired by CPUC to manage program enrollment, claiming that they botched the rollout of new software used for program enrollment, causing provider to lose millions of dollars, would not be inconsistent with any CPUC order or decision, and thus trial court retained jurisdiction over case; CPUC’s determination that provider was not eligible for reimbursement from CPUC’s program’s fund did not affect whether provider was potentially entitled to damages from companies under tort and related theories, and provider would not have to establish that CPUC erred in making its determination in order to prevail in its action against companies.
Recovery in trial court action brought by provider of telephone services to lower-income residents of state, under a program administered by the California Public Utilities Commission (CPUC), against two companies, hired by CPUC to manage program enrollment, claiming that they botched the rollout of new software used for program enrollment, causing provider to lose millions of dollars, would not enjoin, restrain, or interfere with CPUC in the performance of its official duties, and thus trial court retained jurisdiction over case; crux of provider’s action was to recover damages, not to constrain any of CPUC’s findings or to interfere with CPUC’s oversight of the program, and CPUC did not authorize or direct companies to injure third parties with software malfunctions and errors, thereby immunizing them from claims by those parties.
Remand to trial court was warranted so that it could consider whether the California Public Utilities Commission (CPUC) was an indispensable party to action brought by provider of telephone services to lower-income residents of state, under a program administered by CPUC, against two companies, hired by CPUC to manage program enrollment, claiming that they botched the rollout of new software used for program enrollment, since the trial court never reached the indispensable-party issue when sustaining companies’ demurrers, and therefore never weighed the relevant factors or made any findings.