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No. 14-1598
HYANNIS MARINA, INC.; JAMIE REGAN; ALLIANCE TO PROTECT NANTUCKET
SOUND,
Plaintiffs, Appellants,
MARJON PRINT AND FRAME SHOP LTD.; THE KELLER COMPANY, INC.;
SANDRA P. TAYLOR; TOWN OF BARNSTABLE,
Plaintiffs,
v.
ANGELA M. O'CONNOR, in her official capacity as Chair of the
Massachusetts Department of Public Utilities; JOLETTE A.
Before
Lynch, Chief Judge,
Stahl and Kayatta, Circuit Judges.
"state
defendants"),2
and
two
private
parties,
Cape
Wind
For the
Background4
2008
Id. at 83.
shall
be
proposed
by
the
distribution
company
in
Id.
into
contracts
for
power
generated
"within
the
Id.
unconstitutionally
discriminated
against
-5-
interstate
DPU settled
back out of its agreement with Cape Wind. DPU instead approved the
Cape Wind-National Grid PPA in DPU Order 10-54.6
of-state.
energy with those three companies at half the initial price Cape
Wind was charging National Grid pursuant to the Cape Wind-National
Grid PPA.
Later in 2010, NSTAR filed an application with DPU
requesting that it approve NSTAR's proposed merger with Northeast
Utilities,
Connecticut-based
electric
utility
distribution
company.7
assessing
merger
applications,
meaning
that
mergers
would
be
See D.P.U.
proceeding.
electric
utility
mergers,
which
was
more
demanding
than
the
existing "no net harm" standard but less stringent than the
"substantial net benefit" standard that DOER requested.
DPU
justified the new standard in part by pointing out that this was
its first opportunity to consider a merger of electric utilities
since the Massachusetts legislature enacted (1) the GCA, which
specifically provided that DPU, in reviewing a merger transaction,
must consider whether the merger will contribute to a "reliable,
cost effective energy delivery system," 2008 Mass. Acts ch. 169,
69, amending Mass. Gen. Laws ch. 164, 96, and (2) the GWSA,
which required that all Massachusetts state agencies "consider
reasonably
foreseeable
climate
change
impacts"
in
issuing
contested the stay, informing DPU that the delay jeopardized the
merger agreement due to the agreement's internal deadlines and
evolving
circumstances
that
could
"affect
the
financial
-8-
scuttle the merger unless NSTAR entered into a contract with Cape
Wind."
Of course, it was DPU, not DOER, that got to decide
whether
and
on
Nevertheless,
what
the
terms
theory
the
of
merger
the
would
complaint
be
is
approved.
that
DOER's
enter
into
"secret
negotiations"
with
the
Massachusetts
for
NSTAR's
merger
with
Northeast
Utilities.
Those
settlement
agreement
included,
among
other
with
the
public
interest."
Under
the
settlement
The
-9-
National Grid.
order).
After three public comment hearings and two evidentiary
hearings, DPU issued a final decision on November 26, 2012,
approving the Cape Wind-NSTAR PPA.
above-market
costs
in
its
annual
reconciliation
filings.
According to the PPA itself, DPU will also serve as the arbiter for
determining when "Physical Construction" of the Nantucket Sound
facility commences under the PPA.
-10-
Mass. Gen. Laws ch. 25 5,8 and instead filed this action in
federal district court fourteen months later, claiming that they
would incur higher electricity rates under the PPA and suffer
"negative impacts to the environment, regional economy, historic
and
cultural
resources,
public
safety,
and
recreational
opportunities."
Plaintiffs' complaint sought "a declaration that the
Commonwealth of Massachusetts violated both the dormant Commerce
Clause and the Supremacy Clause when it used its influence over
NSTAR's merger request to bring about NSTAR's entry into an abovemarket
wholesale
"appropriate
electricity
injunctive
contract
relief
to
with
remedy
Cape
the
Wind,"
and
constitutional
that
by
NSTAR
to
enter
the
PPA
with
Count 2
more detail below, determined that "the debate begins and ends with
the Eleventh Amendment," and held that sovereign immunity barred
the court's jurisdiction to hear plaintiffs' claims.
In a series
This timely
& Light Co. v. Thornburg, 476 U.S. 953, 966 (1986). As the Third
Circuit recently explained, "[w]hile FERC once directly considered
whether the wholesale rates submitted to it were 'just and
reasonable,'" the agency now "favors using market mechanisms to
produce competitive rates for interstate sales and transmissions of
energy." PPL Energyplus, LLC v. Solomon, 766 F.3d 241, 247 (3d
Cir. 2014).
10
appeal
from
the
district
court's
dismissal
with
prejudice
followed.11
II.
A.
Discussion
Standard of Review
A district court's dismissal for lack of subject matter
Sovereign Immunity
1.
provides that "[t]he judicial power of the United States shall not
be construed to extend to any suit in law or equity, commenced or
prosecuted against one of the United States by Citizens of another
State, or by Citizens or Subjects of any Foreign State."
Const. amend XI.
U.S.
123,
15960
(1908),
which
permits
"federal
courts,
The exception
-14-
scheme
for
the
enforcement
against
State
of
by
federal
law,
the
Supreme
Court
articulated
the
Id. at
Court
reasoned
that
request
"that
state
officials
be
-15-
that
"the
[state
commission's]
order
was
probably
not
inconsistent with federal law after all." Id. The Court responded
by stating that the "inquiry into whether suit lies under Ex parte
Young does not include an analysis of the merits of the claim."
Id. (citing Idaho v. Coeur d'Alene Tribe of Idaho, 521 U.S. 261,
281 (1997) ("An allegation of an ongoing violation of federal law
. . . is ordinarily sufficient to invoke [Ex parte Young].")).
This
straightforward.
concurring)
"straightforward
inquiry"
is
not
always
so
(calling
the
Verizon
test
"deceptively
simple").
Edelman, 415
U.S. at 667. Also, there are "certain types of cases that formally
meet the [Ex parte] Young requirements of a state official acting
inconsistently with federal law but that stretch that case too far
and would upset the balance of federal and state interests that it
embodies."
-16-
purely
Order 12-30.
due
to
DPU's
(allegedly
unconstitutional)
terms.
The
relief
requested
is
"properly
marks omitted).
The district court did not claim that plaintiffs sought
damages from the state treasury.
that a claim for money damages is not a sine qua non for finding a
lack of federal court jurisdiction. See Coggeshall v. Mass. Bd. of
Registration of Psychologists, 604 F.3d 658, 666 n.4 (1st Cir.
2011) ("We do not imply that the Eleventh Amendment bars claims
-17-
In this manner,
Va.
Office for Prot. & Advocacy v. Stewart, 131 S. Ct. 1632, 1639
(2011) (quoting Verizon, 535 U.S. at 645 (internal quotation marks
omitted). In answering this question in the negative, the district
court found that:
[T]he
effect
of
a
declaration
that
Massachusetts had illegally compelled [NSTAR]
and Cape Wind to enter an above-market price
contract for wind energy would inevitably lead
to
restitutionary
claims
against
the
Commonwealth by NSTAR and Cape Wind, while an
injunction ordering DPU to cease enforcement
of the PPA and to take remedial measures for
the
alleged
constitutional
harms
would
restrain the State from acting by frustrating
its
efforts
to
implement
the
policies
enunciated in the GCA and the GWSA, while
further bleeding the treasury.
(Footnote omitted).
As plaintiffs persuasively
So,
-18-
would
in
fact
"bleed
the
treasury"
may
be
barred
by
the
this
point,
too,
plaintiffs
have a persuasive
respect to the PPA, because Order 12-30 states that DPU will
"review NSTAR Electric's recovery of above-market costs in its
annual reconciliation filings" to "ensure that [NSTAR] recovers
such costs in a manner approved by [DPU]."
-19-
DPU approved, also provides that "upon petition by" NSTAR, DPU
shall determine whether "Physical Construction" has commenced by
December 31, 2015, and if it has not commenced, NSTAR "shall
terminate" the PPA as of said date.12
occurred in the past therefore does not itself push the complaint
outside the confines of the Ex parte Young doctrine.
supports
this
conclusion:
most
unconstitutional
Logic
agency
See
12
C.
to
remand.
See,
e.g.,
United
States
ex
rel.
Estate
of
F.3d
1,
21
(1st
Cir.
2007)
(assessing
the
viability
of
Cape
Wind,
stating
that
NSTAR
-21-
was
invoking
its
right
to
On the
next day, NSTAR filed a letter with this court notifying us of the
termination and opining that the termination mooted this appeal.
We responded by instructing the parties to submit supplemental
briefing
to
explain
what
had
occurred
and
to
set
forth
any
parties
also
advance
different
views
on
the
Supreme
Court
has
placed
the
"heavy
burden
of
-22-
Cnty. of Los
Angeles v. Davis, 440 U.S. 625, 631 (1979); accord Knox v. Serv.
Emps. Int'l Union, Local 1000, 132 S. Ct. 2277, 2287 (2012) ("[A]s
long as the parties have a concrete interest, however small, in the
outcome of the litigation, the case is not moot." (alteration in
original) (internal quotation marks omitted)).
If Cape Wind agreed that NSTAR's termination of the PPA
was valid, we would have little difficulty determining that the
case
was
moot.
There
would
be
no
legally
binding
contract
uncontested
NSTAR's
termination
settlement
of
the
moots
contract,
appeal).
however,
is
-23-
F.3d 20, 36 (1st Cir. 2011) (deciding that "[w]e cannot conclude
that [the plaintiff's] claim . . . is moot," because "there appear
to be unresolved disputes as to whether [the defendant] has met its
. . . obligations" under the relevant statute); cf. United States
v.
Hahn,
359
F.3d
1315,
1323
(10th
Cir.
2004)
(en
banc)
NSTAR
predicates
its
mootness
argument
on
its
own
13
Depositors Econ. Prot. Corp., 45 F.3d 530, 536 (1st Cir. 1995)
(internal quotation marks omitted). Resolution of the actual claim
here--that Massachusetts officials unconstitutionally forced NSTAR
to enter a contract with Cape Wind--hinges on an assessment of
events that have already occurred.
If we were to find
That standard is
satisfied here because Cape Wind and/or NSTAR would undoubtedly act
-25-
Res. Mgmt. Council, 589 F.3d 458, 46869 (1st Cir. 2009) (deciding
that case was ripe in part because a holding on the merits would
cause the contested agency decisions and regulations to "cease to
be barriers to ultimate approval of the project").
Of course, the
resolving
the
contract
issues
-26-
and
the
remaining
legal
Conclusion
to
state
claim.
See
Schatz
v.
Republican
State
Nor do we
-27-