THE “DOCTRINE OF PRIMARY JURISDICTION” APPLIED TO THIS BREACH OF CONTRACT ACTION BETWEEN UTILITY PROVIDERS; THE UNDERLYING ACTION SHOULD HAVE BEEN STAYED, NOT DISMISSED, PENDING A RULING BY THE PUBLIC SERVICE COMMISSION (PSC) (FOURTH DEPT).

The Fourth Department, reversing (modifying) Supreme Court, applying the “doctrine of primary jurisdiction,” determined the underlying breach of contract action between the utility providers should have been stayed (not dismissed without prejudice) pending a ruling by the Public Service Commission (PSC):

Although “[t]here is no fixed formula governing the application of the doctrine to the facts of a particular case . . . [,] the court must determine in each case whether the reasons for the doctrine are present and whether the purposes of the doctrine will be served by its application” … . Factors considered by courts in determining whether the doctrine applies include, “(1) whether the question at issue is within the conventional experience of judges or whether it involves technical or policy considerations within the agency’s particular field of expertise; (2) whether the question at issue is particularly within the agency’s discretion; (3) whether there exists a substantial danger of inconsistent rulings; and (4) whether a prior application to the agency has been made” … . * * *

… [W]e conclude that the PSC has primary jurisdiction over plaintiff’s claims because “the determination of the issues involved, under a regulatory scheme, depends upon the specialized knowledge and experience of th[at] agency” … . * * *

… [T]he court abused its discretion to the extent that it dismissed the complaint without prejudice instead of staying the action pending the PSC’s determination in the proceedings pending before it. In determining the appropriate disposition where the primary jurisdiction doctrine applies, “[a] court in its discretion may choose to dismiss the case without prejudice—but only if the parties would not be unfairly disadvantaged” … .  * * * … [B]y dismissing the complaint without prejudice instead of staying the action, the court would unfairly disadvantage plaintiff because, if plaintiff were to commence another action after the PSC issued its determination, the court might dismiss some of its claims on statute of limitations grounds … . Agway Energy Servs., LLC v Central Hudson Gas & Elec. Corp., 2026 NY Slip Op 05621, Fourth Dept 10-2-26

Practice Point: Consult this decision for an in-depth discussion of the applicability of the “primary jurisdiction doctrine” which allows an agency (here the Public Service Commission) to rule before court liligation proceeds.

Practice Point: Whether to stay the court proceedings or dismiss the proceedings without prejudice pending the agency ruling is a matter of discretion. Here the action should have been stayed, not dismissed, because the statute of limitations might preclude plaintiff from alleging certain causes of action in a new complaint.