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Crim Pro Case Digest: Merida Waterworks District v. Bacarro (2008)

G.R. No. 165993 September 30, 2008

Lessons Applicable: Doctrine of Primary Jurisdiction, Doctrine of exhaustion

Laws Applicable:

  • Merida Water District, a government-owned and controlled corporation4 that operates the water utility services in the municipality of Merida, Leyte conducted a public hearing for the purpose of increasing the water rate
  • March 7, 2002: Merida Water District received a letter from the Local Water Utilities Administration (LWUA) that on March 5, 2002, the LWUA Board of Trustees, per Board Resolution No. 63, series of 2002, confirmed Merida Water District’s proposed water rates.
  • September 3, 2002: Merida implemented a water rate increase of P90 for the first ten cubic meters of water consumption.
  • February 13, 2003: consumers of Merida Water District, filed a Petition for Injunction, etc. because the rates are contrary to the rate increase agreed upon during the public hearing
  • Merida filed a motion to dismiss (then later motion for reconsideration) with the RTC due to failure to exhaust administrative remedies under Presidential Decree (P.D.) No. 198, the Provincial Water Utilities Act of 1973, as amended by P.D. Nos. 768 and 1479 - denied
  • Petition for Review on Certiorari with the CA (then later motion for reconsideration) - denied
  • Petition for Review on Certiorari with the SC
ISSUE: W/N there is lack of jurisdiction with the RTC since the primary jurisdiction should belong to the NWRB under P.D. No. 1067.  (The NWRB does not exercise exclusive jurisdiction)

HELD: YES.  petition is GRANTED
  • petitioners failed to cite any law which impliedly grants the NWRB original and exclusive jurisdiction to resolve a dispute regarding the increase of water rates. A grant of exclusive jurisdiction cannot be implied from the language of a statute in the absence of a clear legislative intent to that effect. An administrative agency with quasi-judicial power is a tribunal of limited jurisdiction, and its jurisdiction should be interpreted in strictissimi juris."
  • The doctrine of exhaustion does not apply when jurisdiction is exclusive. An administrative agency’s exclusive jurisdiction over a certain dispute renders the courts without jurisdiction to adjudicate the same at that stage. The doctrine of exhaustion applies "where a claim is cognizable in the first instance by an administrative agency alone; judicial intervention is withheld until the administrative process has run its course. To cite Abe-Abe v. Manta as the authority to support the allegation that the NWRB has original and exclusive jurisdiction over a dispute regarding a water rate increase is a strained construction of this Court’s pronouncements. Thus, petitioners’ contention that the RTC has no jurisdiction because the NWRB has original and exclusive jurisdiction over a dispute concerning the increase of water rates is clearly without merit.
  • One of the reasons for the doctrine of exhaustion is the separation of powers, which enjoins upon the Judiciary a becoming policy of non-interference with matters coming primarily (albeit not exclusively) within the competence of the other departments. The theory is that the administrative authorities are in a better position to resolve questions addressed to their particular expertise and that errors committed by subordinates in their resolution may be rectified by their superiors if given a chance to do so… It may be added that strict enforcement of the rule could also relieve the courts of a considerable number of avoidable cases which otherwise would burden their heavily loaded dockets.  
  • Although the doctrine of exhaustion does not preclude in all cases a party from seeking judicial relief, cases where its observance has been disregarded require a strong showing of the inadequacy of the prescribed procedure and of impending harm.  Respondents justify their failure to observe the administrative process on the following exceptions to the doctrine of exhaustion of administrative remedies: (1) patent illegality; and (2) a denial of due process. However, respondents fail to show that the instant case merits the application of these exceptions.
  • Jurisprudence affirming the failure to observe the doctrine of exhaustion due to a denial of due process involves instances when the party seeking outright judicial intervention was denied the opportunity to be heard.  Here, respondents admit that Merida Water District conducted a public hearing. . The existence of a hearing for this purpose renders the allegation of a denial of due process without merit.  The failure of the respondents to show that the instant case falls within the exceptions to the doctrine of exhaustion necessitates in the due observance of exhausting the proper administrative remedies before seeking judicial intervention.