Non v. Office of the Ombudsman
REITERATIONFacts
1. The Antecedents: The Electric Power Industry Reform Act (EPIRA) of 2001 established the Energy Regulatory Commission (ERC) to ensure reliable and affordable electric power supply and to protect consumers by setting rates and promoting competition. A key mandate was to institutionalize a methodology for setting transmission, distribution, and retail rates. In 2015, the ERC issued Resolution No. 13, requiring distribution utilities (DUs) to undergo a Competitive Selection Process (CSP) when procuring power supply agreements (PSAs) to ensure transparency and elicit the best price offers. This requirement was to take effect on November 6, 2015, with exemptions for PSAs already filed with the ERC. 2. Procedural History: Following the issuance of Resolution No. 13, stakeholders raised concerns, leading the ERC to issue Resolution No. 1 in March 2016, which extended the CSP implementation deadline to April 30, 2016. Manila Electric Company (MERALCO) subsequently filed seven PSAs on April 29, 2016, allegedly without undergoing CSP. Alyansa Para sa Bagong Pilipinas, Inc. (ABP) filed a complaint with the Office of the Ombudsman, alleging that the ERC commissioners, including petitioners, violated Republic Act No. 3019 by issuing Resolution No. 1 to unduly favor MERALCO. The Ombudsman found probable cause to indict the commissioners for violation of Section 3(e) of R.A. No. 3019 and denied their motion for reconsideration. The commissioners then filed a Petition for Certiorari with the Supreme Court. 3. The Petition: Petitioners Alfredo J. Non, Gloria Victoria C. Yap-Taruc, Josefina Patricia A. Magpale-Asirit, and Geronimo D. Sta. Ana, Commissioners of the ERC, filed this Petition for Certiorari under Rule 65 of the Rules of Court. They assail the Ombudsman's Resolution finding probable cause and its subsequent Order denying reconsideration. Petitioners argue that the Ombudsman committed grave abuse of discretion by finding probable cause without substantial evidence, by usurping the Court's authority to declare Resolution No. 1 invalid, and by proceeding despite the pendency of related cases before the Supreme Court. They contend that Resolution No. 1 was issued in good faith to address concerns from various stakeholders and was a reasonable regulatory action, not an act of partiality, bad faith, or gross negligence.
Issue(s)
Whether the Ombudsman committed grave abuse of discretion in finding probable cause against the petitioners for violation of Section 3(e) of R.A. No. 3019. Whether the issuance of ERC Resolution No. 1, Series of 2016, constituted manifest partiality, evident bad faith, or gross inexcusable negligence, causing undue injury or giving unwarranted benefits.
Ruling
The petition is GRANTED. The Resolution dated 29 September 2017 and Order dated 20 April 2018 of the Office of the Ombudsman are REVERSED and SET ASIDE. The Information against petitioners is DISMISSED for lack of probable cause.
Ratio Decidendi
On Issue 1: The Court held that while it generally upholds the policy of non-interference with the Ombudsman's determination of probable cause, it will review such actions when there is a charge of grave abuse of discretion. Grave abuse of discretion occurs when power is exercised in an arbitrary, capricious, whimsical, or despotic manner. The Court found that the Ombudsman committed grave abuse of discretion by finding probable cause without considering essential facts and by failing to establish the elements of the crime charged. The Court noted that the issuance of Resolution No. 1-2016 was a response to concerns raised by various stakeholders, not solely to favor MERALCO. The Court also pointed out that the Supreme Court itself, in a previous case (G.R. No. 227670), had declared Resolution No. 1-2016 void for grave abuse of discretion, but this did not automatically equate to criminal liability under R.A. No. 3019. On Issue 2: The Court found that the Ombudsman's finding of probable cause rested on the supposition that petitioners violated R.A. No. 3019 by issuing Resolution No. 1-2016, which deferred the implementation of the CSP requirement. However, a perusal of Resolution No. 1-2016 showed that it was issued to address concerns raised by various stakeholders regarding the implementation of CSP, providing a transition period for its full implementation. The Court noted that other industry players, not just MERALCO, raised concerns, weakening the argument of manifest partiality or evident bad faith. The Court concluded that the issuance of Resolution No. 1-2016 was an exercise of the ERC's sound judgment as a regulator and did not constitute arbitrary, whimsical, or capricious action. The Court emphasized that the mere fact that MERALCO benefited from the resolution did not automatically mean it was intended to give undue advantage, especially since the resolution was available to all industry players and was a response to legitimate concerns.
Main Doctrine
The Supreme Court may review the Ombudsman's determination of probable cause when tainted with grave abuse of discretion, which requires more than mere error of judgment and must be so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law. The elements of Section 3(e) of R.A. No. 3019, namely, manifest partiality, evident bad faith, or gross inexcusable negligence, and causing undue injury or giving unwarranted benefits, must be present to establish probable cause, and a mere procedural error or a debatable legal question does not automatically equate to criminal liability.