Judicial District of New Britain


     Exhaustion of Administrative Remedies; Whether Taxpayer Must Exhaust His Administrative Remedies Before Bringing Action in Superior Court Alleging that the Agency’s Financing Order Constitutes Illegal Taxation and Violates the Equal Protection Clause; Whether Such an Action is Barred by Sovereign Immunity.  In its past session, the legislature enacted Public Act No. 10-179, which authorizes the issuance of economic recovery revenue bonds by the state.  The proceeds of the bonds, approximately $965 million, are to go into the state’s general fund.  The costs of the issuance and repayment of the bonds are to be funded by the “competitive transition assessment” (CTA) imposed on customers of electric distribution companies.  In addition, P.A. 10-179 requires the department of public utility control (DPUC) to assess the customers of electric distribution companies, on a per kilowatt hour basis, an amount sufficient to raise $40 million for transfer to the state’s general fund.  On October 1, 2010, the DPUC ordered the Connecticut Light and Power Company and the United Illuminating Company, pursuant to P.A. 10-179, to increase their current CTA and to transfer the proceeds from the increased CTA to the state’s general fund.  The plaintiff, an electricity customer who is subject to the CTA, brought this action against the DPUC seeking to enjoin it from enforcing that financing order.  The plaintiff contended that, because the proceeds are to be paid into the state’s general fund, the assessment constitutes a direct tax and that the DPUC was without the legal authority to implement it.  Additionally, the plaintiff alleged that the financing order violated the equal protection clause of the state constitution because customers of municipally-owned electric utilities will not be required to pay the extended CTA.  Noting that the DPUC has never issued a final decision regarding the plaintiff’s claims, the trial court dismissed the action on the ground that the plaintiff failed to exhaust his administrative remedies.  It rejected the plaintiff’s claim that the case fell within the futility exception to the exhaustion doctrine, stating that the plaintiff failed to prove that resort to the DPUC would be futile.  Alternatively, the court ruled that it would dismiss the action on the ground that it was barred by the doctrine of sovereign immunity.  In that regard, the court added that the plaintiff’s action failed to satisfy the exceptions to sovereign immunity for injunctive relief, noting that (a) the plaintiff failed to allege that the state’s decision not to require taxpayers of some towns to pay the CTA was motivated by impermissible considerations, and (b) P.A. 10-179 specifically mandates the DPUC to continue the assessment in question.  In this appeal, the Supreme Court will review the trial court’s decision.