Petition — V. Louise McCarren v. Town of Springfield, Vermont and Vermont Public Power Supply Authority

Supreme Court brief1983

Ask Donna

What actually matters in this document.

Text

IN THE eu

Supreme Court of the United States

October Term, 1982

V. LOUISE McCARREN,

ROSALYN L. HUNNEMAN, AND

SAMUEL 8S. BLOOMBERG, IN THEIR

OFFICIAL CAPACITIES AS MEMBERS OF

THE STATE OF VERMONT

PUBLIC SERVICE BOARD, AND THE TOWN

OF CAVENDISH, VERMONT

Petitioners,

TOWN OF SPRINGFIELD, VERMONT

AND VERMONT PUBLIC POWER

SUPPLY AUTHORITY

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE SECOND CIRCUIT

HarrieT ANN KinG*

Kine & KING

Valley Professional Center

Waitsfield, Vermont 05673

(802) 496-4371

May 17, 1983

(List of Counsel Continued on Inside Cover)

QUESTIONS PRESENTED FOR REVIEW

When the State of Vermont Public Service Board (the

“Board’’), a public utility regulatory agency A silo all the

powers of a court of record, has issued a declaratory Ju

ment ruling that it has jurisdiction to require 9g certificate

public good under Vermont law for a hydroeléctric generat-

ing facility proposed to be constructed by the Town of

Springfield and the Vermont Public Power Supply Author-

ity (collectively, ‘“Springfield”’)

Jurisdictional —

1. Does the Anti-Injunction Act, 28 U.S.C. $2283, prohibit

the district court from issuing a declaratory jud igment over-

turning the Board’s ruling and holding the Vermont law

requiring a certificate of public good pre-empted and in-

valid?

2. Is the ruling of the Board res judicata, or may Spring-

or.

——

field, which unsuccessfully argued before the Board that

Board jurisdiction was totally pre-empted by the licensing

requirements of the Federal Power Act relitigate the issue

a second time in a collateral attack in federal court?

3. Does Springfield’s declaratory complaint, which sought

to overturn the Board’s ruling for the sole purpose of

establishing a defense to eal a of that ruling in state

court, establish federal question jurisdiction? y

4. Should the district court have abstained under principles

of comity and federalism from exercising jurisdiction and

substituting itself for the state’s appellate courts?

Merits

1. Can Vermont’s law requiring Board review and the

issuance of a certificate of public good for Springfield's pro-

posed hydroelectric project be accommodated with the

licensing authority of the Federal Energy Regulatory Com-

mission (““FERC’’) under the Federal Power Act?

ill

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW (i)

TABLE OF AUTHORITIES (iv)

OPINIONS BELOW 2

JURISDICTION 2

STATUTORY PROVISIONS INVOLVED 2

STATEMENT OF THE CASE 2

REASONS FOR GRANTING THE WRIT

I. This Court Has Never Decided Whether the Anti-

Injection Act Prohibits Federal Interference in

the Judicial Proceedings of State Administrative

Agencies

II. This Court Has Never Decided Whether Res Judi-

cata Applies to a Fully Litigated Jurisdictional

Claim Predicated on a Claim of Pre-emption,

which at Most Falls into the Penumbral Region

Between State and Federal Authority 8

Ill. The Court of Appeals’ Decision Upholding

Federal Question Jurisdiction Is in Conflict with

Decisions of Other Courts of Appeals Q

IV. The District Court’s Failure to Abstain from Ex-

ercising Jurisdiction, Which Was Upheld by the

Court of Appeals, Raises Important Issues of

Comity and Federalism Which Should Be Decided

by this Court 14 --

V. The Decisions Below, Holding FERC’s Licensing

Authority Exclusive of all State Review Wh xtso-

ever, Improperly Infringe the States’ Rights, Mis-

construe Decisions of this Court and Decide an

Important Question Which Has Not Been De-

cided by this Court . 17

Page

CONCLUSION 25

APPENDIX

Constitutional, Statutory and Regulatory Pro-

visions Involved la

Order of Court of Appeals 6a

Decision of the District Court 8a

Ruling of the Board in Docket No. 4444 57a

Ruling of the Board in Docket No. 4606 62a

TABLE OF AUTHORITIES

Cases: Page

Allegheny Airlines, Inc. v. Pennsylvania Public Utility

Commission, 465 F.2d 237 (3d Cir. 1972), cert.

denied, 410 U.S. 943 (1973) 11

Amalgamated Clothing Workers v. Richman Bros., 348

U.S. 511 (1955) 16

Arizona v. California, 373 U.S. 546 (1963) 24

Atlantic Coast Line R. Co. v. Brotherhood of Locomo-

tive Engineers, 398 U.S. 281 (1970) 6,7

Braniff International, Inc. v. Florida Public Service

Commission, 576 F. 2d 1100 (Sth Cir. 1978) 12

California v. United States, 438 U. 8. 645 (1978) . 18, 20, 22

Chicago and N.W. Transportation v. Kalo Brick & Tile,

450 U. 8. 311 (1981) 19

City of Fresno v. California, 372 U.S. 627 | 1963) 24

Clark v. Memlo, 174 F.2d 978 (D.C. Cir. 1949) 13

Conference of Federal Savings and Loan Associations v.

Stein, 604 F. 2d 1256 (9th Cir. 1979), Aff’'d mem.,

445 U.S. 921 (1980) 12

Durfee v. Duke, 375 U. S. 106 (1963) 8,9

Page

Ezzon Corp. v. Hunt, 683 F. 2d 69 (3d Cir. (1982) 11

Federal Power Commission v. Niagara Mohawk Power

Corp., 347 U.S. 239 (1954) 24

Federal Power Commission v. Oregon, 349 U.S. 435

(1955) 21, 24

Feldman v. Gardner, 661 F. 2d 1295 (D.C. Cir. 1981),

cert. denied, 102 S. Ct. 3483 (1982) 7

First Federal Savings and Loan Association v. Ander-

son, 681 F. 2d 528 (8th Cir. 1982) 1]

First Federal Savings and Loan Association v. District

Bond & Mortgage Investment Company, 687 F. 2d

145 (6th Cir. 1982) 11

First Federal Savings and Loan Association v. Green-

wald, 591 F. 2d 417 (1st Cir. 1979) 12

First Iowa Hydro-Electric Coop. v. Federal Power

Commission, 328 U.S. 152 (1946) 1s, 71.2

Florida Lime and Avocado Growers, Inc. v. Paul, 373

U.S. 132 (1963) 19

Gibson v. Berryhill, 411 U.S. 564 (1973) §. 15

Gully v. First National Bank in Meridian, 299 U. 8. 109

(1936) 10

Hill v. Martin, 296 U.S. 393 (1935) 7

Home Federal Savings and Loan Association v. In-

surance Department of lowa, 571 F. 2d 423 (8th

Cir. 1978) 11

Huffman v. Pursue, Ltd., 420 U.S. 592 (1975) 17

Insurance Corp. of Ireland, Ltd. v. Compagnie des

Bauzetes de Guinea, 102 8S. Ct. 2099 (1982) 8

Ivanhoe Irrigation District v. McCracken, 357 U.S. 275

(1958) 24

Kalb v. Feuerstein, 308 U.S. 433 (1940) g

Page

Lawrence County v. State of South Dakota, 668 F. 2d

27 (8th Cir. 1982) 12

Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149

(1908) 10

Madsen v. Prudential Federal Savings & Loan Associ-

ation, 635 F. 2d 797 (10th Cir. 1980) 12

Maryland v. Louisiana, 101 S. Ct..2114 (1982) 19

Merrill Lynch, Pierce, Fenner & Smith v. Ware, 414

U.S. 177 (1973) 19

Michigan Savings and Loan League v. Francis, 683 F.

2d 957 (6th Cir. 1982) 11

Middleser County Ethics Committee v. Garden State

Bar Association, 102 8. Ct. 2515 (1982) 14, 15, 16

Moore v. Sims, 442 U.S. 415 (1979) 15

Pacific Gas and Electric Co. v. State Energy Resources

Conservation & Development Commission, 51-U:S.

L.W. 4449 (U.S. April 20, 1983) 15

People of State of Ill. v. General Electric Co., 683 F. 2d

206 (7th Cir. 1982) 12

Phillips Petroleum Co. v. Texaco, 415 U.S. 125 (1974) 10

Prentis v. Atlantic Coast Line, 211 U.S. 210 (1908) 6

Public Service Commission v. Wycoff, 344 U.S. 237

(1952) 10, 11

Public Utilities Commission v. United Fuel Gas Co.,

317 U.S. 456 (1983) 16

Public Utilities Commission of California v. United

States, 355 U.S. 534 (1958) 16

Rath Packing Co. v. Becker, 530 F. 2d 1295 (9th Cir.

1979), aff'd sub nom. Jones v. Rath Packing Co.,

430 U.S. 519 (1977) 12

Rice v. Santa Fe Elevator Service Corp., 331 U.S. 218

(1947) 19

vii

Page

Roudebush v. Hartke, 405 U.S.15 (1972) __. 6

Samuels v. Mackell, 401 U.S.66 (1971) __.. 8

Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667

(1957) 10

Stone & Webster Engineering Corp. v. Ilsley, 690 F. 2d

323 (2d Cir. 1982) 13

United Air Lines v. Division of Industrial Safety, 633

F, 2d 814 (9th Cir. 1980), cert. denied, 454 U.S.

944 (1981) 12

United States v. Utah Construction Co., 384 U.S. 394

(1966) 8

Vendo Co. v. Lektro-Vend Corp., 433 U.S. 623 (1977) 6

Younger v. Harris, 401 U.S. 37 (1971) 14

Constitution:

Supremacy Clause, United States Constitution

Art. Vi. cl. 2 passim

Statutes:

A. Federal

Anti-Injunction Act, 28 U.S.C. §2283 5

Federal Power Act, 16 U.S.C.

§791a et seq. passim

§802 19

§821 passim

Federal Declaratory Judgment Act, 28 U.S.C.

§2201-02 passim

Judicial Code, 28 U.S.C. §1331, 1337 os

Federal Reclamation Act of 1902, 43 U.S.C. §383 passim

B. State

Vermont Statutes Annotated, Title 30

§9 5

§248 passim

vill

Regulations:

18 C.F.R. §4.41

Other Authorities:

Wright, Federal Courts (4th ed.)

Note, Federal Jurisdiction over Declaratory Suits

Challenging State Action, 79 Colum. L. Rev. 983

(1979)

Jones, Origins of the Certificate of Public Conveni-

ence and Necessity: Developments in the

States, 1870-1920, 79 Colum L. Rev. 425 (1979)

American Bar Association, The Need for Power

and the Choice of Technologies: State Decisions

on Electric Power Facilities (1981)

12, 13

15, 18

No.

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1982

V. LOUISE McCARREN,

ROSALYN L. HUNNEMAN, AND

SAMUEL 8. BLOOMBERG, IN THEIR

OFFICIAL CAPACITIES AS MEMBERS OF

THE STATE OF VERMONT

PUBLIC SERVICE BOARD, AND THE TOWN

OF CAVENDISH, VERMONT

Petitioners,

TOWN OF SPRINGFIELD, VERMONT

AND VERMONT PUBLIC POWER

SUPPLY AUTHORITY

Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

SECOND CIRCUIT

The Petitioners, members of the State of Vermont Pub-

lic Service Board, and the Town of Cavendish, Vermont

respectfully pray for a writ of certiorari to review the

judgment and opinion of the United States Court of Appeals

for the Second Circuit entered in this proceeding on Febru-

ary 16, 1983.

OPINIONS BELOW

The order of the Court of Appeals for the Second

Circuit appears in the Appendix at 6a. The opinion

of the District Court for the District of Vermont, from

which appeal was taken, is reported at 549 F. Supp. 1134

(D. Vt. 1982), and appears in the Appendix at 8a. The

deciaratory judgment of the Board in Petition of the Town

of Cavendish for Declaratory Ruling, PSB Docket 4444,

which the district court declared null and void, appears in

the Appendix at 57a.

JURISDICTION

The order of the Court of Appeals for the Second Cir-

cuit is dated and was entered on February 16, 1983. This

petition for certiorari was filed within 90 days after that

date. This Court’s jurisdiction is invoked under 28 U.S.C.

§1254(1).

STATUTORY PROVISIONS INVOLVED

This petition raises issues which require a construction

of the Supremacy Clause of the United States Constitution,

Art. VI, el. 2, and the Federal Power Act, in particular 16

U.S.C. §§802, 821, as it relates to the validity of Vermont

Statutes Annotated, Title 30, Section 248. This petition also

raises questions of interpretation of the Anti-Injunction

Act, 28 U.S.C. §2283; the Declaratory Judgment Act, 28

U.S.C. §2201; the Judicial Code, 28 U.S.C. $1331, 1337;

and FERC’s regulation issued under the Federal Power Act

at 18 C.F.R. §4.41 (1978). Reference is also made to the

Federal Reclamation Act of 1902, 43 U.S.C. §383. These

authorities are set forth in the Appendix.

STATEMENT OF THE CASE

This case is about federalism. The threshold questions

address whether a federal court may substitute itself for a

state appellate court and overturn a declaratory judgment

ruling by a state administrative agency acting in its judicial

capacity. The further question, reached only if federal court

jurisdiction was properly invoked, is whether there can be

an accommodation between the state’s interests, in assuring

that proposed hydroelectric generating facilities in Vermont

satisfy local regulatory concerns, and FERC’s federal licens-

ing authority.

Springfield proposes to construct and operate a hydro-

electric generating facility near Springfield, Vermont on the

Black River, a navigable river. On June 5, 1978, Springfield

applied to FERC for a license for the project under the

requirements of the Federal Power Act. FERC has not yet

ruled on the application.

On January 25, 1980, the Town of Cavendish, Vermont

petitioned the Board for a declaratory judgment on whether

Springfield’s proposed project was subject to Board review

under Vermont Statutes Annotated, Title 30, Section 248.

Section 248 requires utilities to obtain a certificate of public

good prior to commencing construction of a generating

facility in Vermont. Prior to issuing the certificate, the

Board considers such local factors as the facility’s impact

on the orderly development of the region; whether it is

needed to supply electrical service; and its effect on aesthe-

tics, historic sites, air and water purity, the natural environ-

ment, and public health and safety.

Springfield appeared as respondent before the Board

and argued that FERC’s licensing jurisdiction pre-empted

the Board from exercising any review whatsoever of the

Black River Project. After briefing and oral argument, on

April 8, 1982, the Board ruled that it had jurisdiction under

§248 and forbade Springfield from commencing site prepar-

ation until Springfield obtained a certificate of public good.

Although Vermont law provides for direct review of the

Board’s declaratory orders by the Vermont Supreme Court,

Springfield did not appeal the Board’s ruling. Instead

Springfield sought a reversal of the Board’s rulin; ‘ederal

district court, and on May 4, 1982, it filed its couplaint

seeking a declaratory judgment under 28 U.S.C. §§2201-2202

that the Board’s ruling was null and void on the same pre-

emptive grounds argued before the Board. Federal court

jurisdiction was asserted under 28 U.S.C. 881331 and 1337.

The Town of Cavendish moved to intervene on behalf

of the Board in the district court action, and that motion

was granted. On October 15, 1982, the district court filed its

decision granting Springfield summary Judgment and the

declaratory relief sought. The Petitioners timely appealed

to the United States Court of Appeals for the Second Cir-

cuit. On February 16, 1983, the court of appeals affirmed the

judgment of the district court. This Petition for Writ of

Certiorari was timely filed on May 17, 1983.

REASONS FOR GRANTING THE WRIT

The applicability of the Anti-Injunction Act, the prin-

ciples of res judicata, the grounds for federal question juris-

diction, and principles of comity, as they relate to this case,

present complicated and extraordinarily important ques-

tions of federalism. If allowed to stand, the decisions below

will improperly expand the jurisdiction of the federal courts

to include the resolution of controversies which the state

courts are fully authorized and competent to decide. The

Second Circuit, in authorizing federal jurisdiction, which

was in essence the exercise of appellate review of a state

judicial decision, has so far departed from the accepted and

usual course of judicial proceedings, and has so far sanc-

tioned a departure by the lower court, as to eall for an

exercise of this Court’s power of supervision.

I. This Court Has Never Decided Whether the Anti-

Injunction Act Prohibits Federal Interference in the

Judicial Proceedings of State Administrative Agen-

cies.

The Anti-Injunction Act, 28 U.S.C. §2283, prohibits the

granting of a federal injunction which “stays proceeding in

a State Court”. This Court has never decided whether the

Anti-Injunction Act extends to the judicial proceedings of

state administrative agencies. Decision on the question was

expressly reserved in Gibson v. Berryhill, 411 U.S. 564, 573,

n.12 (1973), where this Court stated:

“(t]he District Court held §2283 inapplicable in the

present case because the plaintiffs sought an injunction

against a state administrative body and not a state

court. Whether this distinction is tenable in all circum-

stances — even where the administrative proceeding is

adjudicatory or quasi-judicial in character — we need

not decide here since the present action was brought

under 42 U.S.C. §1983.”

The Board is given, by Vermont law, all the powers of

a court of record, including appropriate enforcement

powers.’ In issuing its declaratory judgment, the Board was

exercising a purely judicial function. Thus, this case square-

ly presents the undecided question of whether the judicial

functions of state administrative agencies are protected

from federal interference.

The question as it is presented here is particularly im-

portant and fundamental because the courts below, in over-

1 Under 30 V.S.A. §9, the Board “shall have the powers of a court

of record, both at law and in equity, in the determination and adjud-

ication of all matters over which it is given jurisdiction. It may render

judgments, make orders and decrees, and enforce the same by any

suitable process issuable by courts of law and equity in this state.”

turning the Board’s ruling, in effect, substituted themselves

for Vermont’s appellate courts. Yet it is a fundamental pre-

cept that the lower federal courts were not given the power

to sit in direct review of state judicial determinations.

Atlantic Coast Line R. Co. v. Brotherhood of Locomotive

Engineers, 398 U.S. 281, 286 (1970). Indeed, the prevention

of such appellate review was a primary purpose of the Anti-

Injunction Act. Vendo Co. v. Lektro-Vend Corp., Stevens,

J. dissenting, 433 U.S. 623, 658 (1977).

This case also raises the question whether the courts

below misconstrued the principles, laid down by Justice

Holmes in Prentis v. Atlantic Coast Line, 211 U.S. 210

(1908), which have been the basis of Anti-Injunction Act

analysis for the past 70 years. Under Prentis, in determin-

ing whether the Anti-Injunction Act applies, function rather

than form controls. Jd. at 226. Whether a state decision-

making tribunal is a “court” within the meaning of the Act

depends on the nature of the particular proceedings: pro-

ceedings which are judicial in character are protected from

federal interference. Jd.

At issue in Prentis was whether a predecessor of the

Anti-Injunction Act barred a federal injunction against en-

forcement of a railroad rate order issued by the Virginia

State Corporation Commission, a public utility regulatory

agency like the Board. While the decision held that the

Act did not apply, that holding was based on the determin-

ation that the Commission, in establishing rates, was ex-

ercising a legislative, rather than a judicial, power. If the

Commission had been exercising a judicial power, under

Justice Holmes’ analysis, the Commission would have been

protected by the Act.

The converse of Justice Holmes’ analysis is that the

Anti-Injunction Act does not apply when a state court

exercises administrative functions. Roudebush v. Hartke,

‘

405 U.S. 15 (1972); Feldman v. Gardner, 661 F.2d 1295

(D.C. Cir. 1981), cert. denied, 102 S. Ct. 3483 (1982). The

courts below, in suggesting that Prentis’ functional rule is

to be applied only in those circumstances, ignore that the

rule was formulated in a case involving proceedings before

a state public utility regulatory agency for the purpose of

determining whether the Act protected the agency’s pro-

ceedings.

While Prentis hinges the applicability of the Act on

whether the state proceedings are judicial in character, the

courts below hinge the Act’s applicability on whether the

state proceedings are in rem or in personam. The determin-

ation that the Board’s in rem proceedings are protected by

the Act, but its in personam proceedings, including the

declaratory judgment proceeding at issue here, are unpro-

tected is untenable and unsupported by judicial precedent.

Furthermore, the assertion in the decisions below that

the Board cannot be a “court’’, at least for in personam ac-

tions, because a separate proceeding before the Vermont

Supreme Court may be required under Vermont law to en-

force the Board’s ruling, is precluded by Hill v. Martin, 296

U.S. 393 (1935). Hill v. Martin held that any further pro-

ceedings required to compel satisfaction of a state order

does not defeat the applicability of the Act. Jd. at 401, 402.

This Court has ruled that the Anti-Injunction Act is

strictly construed against federal interference. Atlantic

Coast Line R. Co. v. Brotherhood of Locomotive Engineers,

398 U.S. 281 (1970). It has ruled that the Act imposes an

absolute prohibition which applies to the results of com-

pleted court proceedings. /d. It has ruled that questions of

federal pre-emption do not create an exception to the Act.

Id. And this Court has ruled that while the Act refers only

to injunctive relief, it cannot be circumvented by seeking a

declaratory judgment which would have the same effect as

an injunction. Samuels v. Mackell, 401 U.S. 66 (1971).

In contrast, the courts below ruled that the Anti-

Injunction Act does not apply to the proceedings of a state

administrative agency which possesses, and was exercising,

judicial powers, notwithstanding that the federal inter-

ference in the state proceeding was particularly pronounced

because the federal courts, in effect, substituted themselves

for Vermont's appellate courts. If left uncorrected, the

decisions below will result in unnecessary and potentially

disruptive federal declaratory interference in the basic

judicial functions of state administrative agencies.

II. This Court Has Never Decided Whether Res Judica-

ta Applies to a Fully Litigated Jurisdictional Claim

Predicated on a Claim of Pre-emption, Which at

Most Falls into the Penumbral Region Between State

and Federal Authority.

Springfield extensively argued against the Board’s $248

jurisdiction in the declaratory judgment proceeding before

the Board. Springfield could have obtained direct review

of the Board’s adverse determination from the Vermont

Supreme Court. Instead Springfield sought review in a

collateral attack in federal district court.

It is established law that res judicata applies to ques-

tions or jurisdiction, just as to other issues, if the jurisdic-

tional question was fully litigated in the original forum.

Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauzetes

de Guinea, 102 S. Ct. 2099 (1982); Durfee v. Duke, 375 U.S.

106 (1963). It is also established that res judicata applies to

judicial functions of administrative agencies where the dis-

puted issues were litigated. United States v. Utah Construc-

tion Co., 384 U.S. 394 (1966). But this Court has not de-

cided whether a fully litigated jurisdictional claim before a

state quasi-judicial agency can be relitigated merely because

the jurisdictional defense was based on pre-emption in the

penumbra! region of state and federal regulatory authority.

In Durfee v. Duke, 375 U.S. 106, 114 (1963), this Court

cited Kalb v. Feuerstein for the proposition that“ [d]octrines

of federal pre-emption .. may in some contexts be controll-

ing.” (emphasis added.) But the Durfee decision in a foot-

note also implies that had the jurisdictional issue been

litigated in the first forum, res judicata would apply. /d. at

n.12. In Kalb v. Feuerstein, 308 U.S. 433 (1940), res judicata

was not applied to a claim of federal pre-emption for two

reasons: first, the issue had not been litigated and second,

the pre-emption was expressly containd in the federal

statute. In this case, the issue of federal pre-emption was

extensively litigated before the Board, and pre-emption is

not claimed under a specific statutory provision. Thus, the

question of res judicata presented here raises important

legal issues which have not been decided by this Court.

The states and their officials are bound by the Consti-

tution and the federal statutory law. Yet the courts below

failed to apply res judicata based solely on the fact that the

Board is an administrative agency and its ruling rests on a

question of federal pre-emption. The courts’ decisions im-

peach the competence and procedures of Vermont's judicial

tribunals. The intervention of this Court is required to

decide whether the refusal to apply the rule of finality of

jurisdictional determinations improperly narrows the doc-

trine of res judicata.

III. The Court of Appeals’ Decision Upholding Federal

Question Jurisdiction Is in Conflict with Decisions

of Other Courts of Appeals.

Federal jurisdiction under 28 U.S.C. §§1331, 1337 re-

quires that a right or immunity created by the Constitution

or the laws of the United States be an essential element of

the plaintiff’s claim. Gully v. First National Bank in

Meridian, 299 U.S. 109 (1936); Louisville & Nashville R.

Co. v. Mottley, 211 U.S. 149 (1908). It is not enough that a

federal question appears in the complaint as an anticipation

or reply to a probable defense. Phillips Petroleum Co. v.

Texaco, 415 U.S. 125 (1974).

Springfield’s complaint alleged that Board jurisdiction

is pre-empted by federal law. But the federal claim is assert-

ed only as a defense to the Board’s enforcement of its ruling.

The actual controversy is the application of the state

statute.

The Second Circuit’s decision that federal pre-emptiun,

raised as a defense to a threatened state action, supports

federal jurisdiction is in conflict with the principles enunci-

ated by this Court in Public Service Commission v. Wycoff,

344 U.S. 237 (1952). It is also in conflict with decisions by

the Third, Sixth, Seventh, Eighth, Ninth and Tenth Circuits

which have followed Wycoff. Because it is an extraordin-

arily important jurisdictional holding, it should be reviewed

by this Court.

The Declaratory Judgment Act is procedural only.

Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667

(1957). To permit a declaratory plaintiff to invoke federal

jurisdiction to assert the validity of his federal defense has

been held to result in an unintended extension of federal

jurisdiction. Public Service Commission v. Wycoff, 344 U.S.

937 (1952). In Wycoff this court observed:

‘‘Ti]n this case, as in many actions for declaratory

judgment, the realistic position of the parties is re-

versed. The plaintiff is seeking to establish a defense

against a cause of action which the declaratory defen-

dant may assert in the Utah courts. Respondent here

has sought to ward off possible action of the petitioners

by seeking a declaratory judgment to the effect that he

will have a good defense when and if that cause of

action is asserted. Where the complaint in an action for

declaratory judgment seeks in essence to assert a de-

fense to an impending or threatened state court action, it

is the character of the threatened action, and not of the

defense, which will determine whether there is federal-

question jurisdiction in the District Court. If the cause

of action, which the declaratory defendant threatens to

assert, does not itself involve a claim under federal iaw,

it is doubtful if a federal court may entertain an action

for a declaratory judgment establishing a defense to

that claim. This is dubious even though the declaratory

complaint sets forth a claim of federal right, if that

right is in reality in the nature of a defense to a

threatened cause of action. Federal courts will not seize

litigations from state courts merely because one, nor-

mally a defendant, goes to federal court to begin his

federal-law defense before the state court begins the

case under state law.” Jd. at 248.

The majority of the federal courts have followed Wycoff

and held that federal jurisdiction is lacking where a declara-

tory suit seeks to establish a defense of federal pre-emption

to a threatened state action. Allegheny Airlines, Inc. v.

Pennsylvania Public Utility Commission, 465 F.2d 237 (3d

Cir. 1972), cert. denied, 410 U.S. 943 (1973); Exzon Corp.

v. Hunt, 683 F.2d 69 (3d Cir. 1982); Michigan Savings and

Loan League v. Francis, 683 F.2d 957 (6th Cir. 1982) ; First

Federal Savings & Loan Association v. District Bond

& Mortgage Investment Company, 687 F.2d 143 (6th Cir.

1982); Home Federal Savings and Loan Association v. In-

surance Department of Iowa, 571 F.2d 423 (8th Cir. 1978) ;

First Federal Savings and Loan Association v. Anderson,

681 F.2d 528 (9th Cir. 1982); Lawrence County v. State of

South Dakota, 668 F.2d 27 (8th Cir. 1982); United Air

Lines v. Division of Industrial Safety, 633 F.2d 814 (9th

Cir. 1980), cert. denied, 454 U.S. 944 (1981); Madsen v.

Prudential Federal Savings & Loan Association, 635 F.2d

797 (10th Cir. 1980).

Other Courts have attempted, not always convincingly,

to distinguish Wycoff on the facts of the case. First Federal

Savings & Loan Association v. Greenwald, 591 F.2d 417 (1st

Cir. 1979); Braniff International, Inc. v. Florida Public

Service Commission, 576 F.2d 1100 (Sth Cir. 1978); Con-

ference of Federal Savings and Loan Associations v. Stein,

604 F.2d 1256 (9th Cir. 1979), aff'd mem., 445 U.S. 921

(1980); Rath Packing Co. v. Becker, 530 F.2d 1295 (9th

Cir. 1975), aff'd sub nom. Jones v. Rath Packing Co.,

430 U.S. 519 (1977). One court has expressly rejected

Wycoff. People of State of Ill. v. General Electric Co., 683

F.2d 206 (7th Cir. 1982).

The question posed by Wycoff, whether federal juris-

diction exists where a party seeks a declaration that he is

immune, by virtue of federal law, from a non-federal claim,

has troubled the commentators as well as the courts. Pro-

fessor Wright sees two possible approaches:

“t]he complaint in a declaratory judgment action may

be judged on its own merits; if it reveals a federal

claim, then jurisdiction will exist. But this, as will be

seen, woulc permit some cases to be brought in federal

court that could not be so brought absent the Declara-

tory Judgment Act. The alternative is to say that the

declaratory action may be entertained in federal court

only if the coercive action that would have been neces-

sary, absent declaratory judgment procedure, might

have been so brought.” Wright, Federal Courts, §18,

p. 100 (4th ed.)

In Wright’s opinion, when the issue is finally settled the

latter, narrow test will be the law. Jd. at 102.

In contrast, - Second Circuit in Sione &

Engineering Corp. v. Ilsley, 690 F.2d 323 (2d Cir. 1982).

adopted the position talon 3 in a Columbia Law Review Note

”" aT

that “federal courts have jurisdiction to entertain any dec-

laratory suit that alleges a federal claim that could be

asserted in an action for injunctive relief, regardless of

whether an injunction would actually have been granted”

Note, Federal Jurisdiction over rstaneactn y pie Challeng-

ing State Action, 79 Colum. L. Rev. 983, 1000 (1979). How-

ever, that test too has problems. Since the practical effect

of declaratory and injunctive relief is virtually j identical, the

test establishes a formalistic means of circumventing the

jurisdictional limitations of the PE Judgment Act.

cannot be reconciled with iv ycoff’s an d Prof essor \

view that the linchpin of federal question jurisdiction is

whether the threatened state action could have been brought

in federal court.

Where, as here, an attempt is made to use the federa

court for appellate review of a state tribunal’s decision, the

potential for interference with state court litiga

demned in Wycoff is particularly pronounced. As th

said in Clark v. Memolo, 174 F.2d 978, 981 (|

1949): ‘“[t]he primary purpose of the [ Declarat

ment Ajct [is] to have a declaration of rights not

fore determined, and not to determine whether

theretofore adjudicated, have been properly adjudicated.

The difficult and complicated jurisdictional questions

raised by Springfield’s declaratory challenge to the val iit ty

of the Board’s ruling require explication by this Court. A

decision by this Court will provide for uniformity and

eliminate the confusion engendered by the Court of Appeals’

differing applications of Wycoff.

IV. The District Court’s Failure to Abstain from Exer-

cising Jurisdiction, Which Was Upheld by the Court

of Appeals, Raises Important Issues of Comity and

Federalism Which Should be Decided by this Court.

Springfield, without resorting to its available and fully

adequate state remedies, asked the district court to overturn

the Board’s declaratory ruling. Whether the district court

was correct in exercising its jurisdiction and granting t.:at

request presents important questions of comity and fed-

eralism between state and federal courts.

In Younger v. Harris, 401 U.S. 37, 44 (1971), this Court

described the notion of comity as including:

‘“,.@ proper respect for state functions, a recognition

of the fact that the country is made up of a Union of

separate state governments, and a continuance of the

belief that the National Government will fare best if

the States and their institutions are left free to perform

their separate functions in their separate ways”

When important state interests are involved, Younger

abstention is applied to state administrative proceedings

which are judicial in character. Middlesex County Ethics

Committee v. Garden State Bar Association, 102 8. Ct. 2515

(1982). The state interests present here warrant federal

abstention.

Vermont’s interest in reviewing proposed generating

facilities and requiring a certificate of public good is both a

traditional and a substantial state interest. Section 248

review is a major component of Vermont’s efforts to plan

comprehensively for its future energy needs. The criteria

reviewed balance economic objectives against other local

interests and goals vital to assuring the protection of the

public interest.

“Need for new power facilities [and] their economic

feasibility . . . are areas that have been characteristically

governed by the States.” Pacific Gas and Electric Co. v.

State Energy Resources Conservation & Development Com-

mission, 51 U.S.L.W. 4449 (U. S. April 20, 1983). State

authority over new power facilities has been implemented

traditionally by the requirement of a certificate of public

convenience and necessity which is the same as Vermont’s

certificate of public good. See, Jones, Origins of the Certifi-

cate of Public Convenience and Necessity: Developments in

the States, 1870-1920, 79 Colum. L. Rev. 426, 454-55

(1979) ; American Bar Association, The Need for Power and

Choice of Technologies: State Decisions on Electric Power

Facilities (1981).

The courts below found that an important state interest

was not present because the Board’s ruling came about upon

an application by the Town of Cavendish. But irrespective

of how this controversy was initiated, the Board’s own rul-

ing is under attack and the members of the Board in their

official capacities are defending that ruling.

This Court has repeatedly stated that the federal courts

should abstain from exercising jurisdiction where there is

opportunity to raise and have timely decided by a compe-

tent state tribunal the federal issues involved. Middlesex

County Ethics Committee v. Garden State Bar Association,

102 S. Ct. 2515 (1982); Moore v. Sims, 442 U.S. 415, 430

(1979) ; Gibson v. Berryhill, 411 U.S. 564,577 (1973). Here,

Springfield litigated the jurisdictional issue before the

Board, and Vermont law authorized Springfield to appeal

the Board’s ruling directly to the Vermont Supreme Court.

That court had full power and responsibility to decide

Springfield’s federal claims.

emption

But as this Court noted in Amalgamated Clothing

» ie ‘ - - oO ~ - ~= 1

Workers v. Richman Bros., 348 U.S. 511, 519 (1955), the

adequacy of state review is not impa |

of federal law or constitutional ris

er) ht] ry lir ae a f dam oT atic nr he weer fadoare lg

ouUuuU e 441i Ji qaemarcation petw wo? Ht iv we | a

diction. See also, Middlesex County Ethics Committee v.

ie = ; 7 ? | ] ] Ai ae

failing to afford Vermont’s tribunals the opportunity to

} : e 7%

address an attack on state authority based on federal law

the decisions below raise important questions of federalism

C United States. 353 US. 534 (1958 '

; ‘ i “? - r + -

STSrs) 3+ iv.) ] . )

+ + = = a+ «+ I ecceekoes. aaeastiniin, sbiaaniien tal cia i

a 4 4 - me © iS J 4

rey y ; ’ . not r\? + r , ts +r

, S ) ( = S

4 i i iV L ai a As 4 i i ’ JUIUA El ay W

tha fodarea eolrtes

A 4 Ju :

ong period the case had been in federal court, and the fact that the

defendant would have had to incur substantial expense to comply

with the state order, or if it did not comply, risk incurring heavy fines

The holding there cannot be extended to apply to the facts presented

+ ‘

+ er Q* ry

~ S 34 ] PS — I 4 or a4

I wh BOs ack i P| 3 { { 4 4 a

tr I rit + «tt ? y . ee r ‘ t r , ? r . ; rr}

4 ‘ 1Leéa iL¢és eed (} DuUrsu ~ ‘ ; }s 4 ‘ ‘ { iil ) 1a

Yr)? vate r ; { Pag ? ; y ‘ ; 7 tu"? r

( ¢) bs eaaae S510 } { ~ AS » f at - ws 4 a’ = te ¥ a 7 at os jif

r ry trot Toney ‘ 2 ? yay t ? ‘ r thor ¢ ntort N

the @Uliii = Live Ai y ita iV? ait HU vy f 7 ¢ f ii VO

} j am +<> + ui - ne 4 thes B —_ + —— € ¢}

suc 118apd VY €XISts Wi sp »0arda s é i if

particularly important in view of this Court’s observations

in Huffman v. Pursue, Ltd. 420 U.S. 592, 608 (1975):

“{vJirtually all of the evils at which Younger is directed

would inhere in federal intervention prior to completion

of state appellate proceedings, just as surely as they

would if such intervention occurred at or before trial.

Intervention at the later stage is if anything more

highly duplicative, since an entire trial has already

taken place, and it is also a direct aspersion on the

capabilities and good faith of state appellate courts.”

The Court further observed:

“{iJn short, we do not believe that a State’s judicial

system would be fairly accorded the opportunity to

resolve federal issues arising in its courts if a federal

district court were permitted to substitute itself for

the State’s appellate courts. We therefore hold that

Younger standards must be met to justify federal inter-

vention in a state judicial proceeding as to which a

losing litigant has not exhausted his state appellate

remedies.” Jd. at 609.

V. The Decisions Below, Holding FERC’s Licensing Au-

thority Exclusive of all State Review Whatsoever,

Improperly Infringe the States’ Rights, Misconstrue

Decisions of this Court and Decide an Important

Question Which Has Not Been Decided by this

Court.

The courts below denied the Board any authority what-

soever to review and require a certificate of public good for

the Black River hydroelectric project and held that exclu-

sive Jurisdiction over every conceivable matter pertaining to

that project rests with FERC. The courts so held, notwith-

standing, that FERC has expressed no opposition to the

Board's authority, and FERC’s regulations, as discussed be-

low, specifically recognize such authority. And the courts

so held in spite of the fact that Springfield has not been

subjected to any conflicting state and federal requirements;

neither the Board nor FERC has yet acted.

This case raises the question whether the decisions be-

low improperly upset the delicate balance between state and

federal authority. The question is particularly fundamental

because the courts below invalidated what is only an antici-

pated exercise of state jurisdiction which cannot be shown

to be inconsistent with either the letter or intent of federal

law or regulation.

Certificates of public convenience and necessity are a

traditional and essential component of most states’ regula-

tion of public utilities; thirty-eight states require prior

certification of new power plants. American Bar Associa-

tion, The Need for Power and the Choice of Technologies:

State Decisions on Electric Power Facilities, 5 (1981).

Many states also regulate other aspects of utility operations,

such as proposed financings, which also touch on projects

subject to FERC’s licensing authority. Jd. at 8. If left un-

corrected, the holdings of the courts below threaten all such

regulatory schemes and effect a drastic redistribution of

state and federal authority.

Review by this Court is also needed because the de-

cisions below misconstrued California v. United States, 438

U.S. 645 (1978), which sustained California’s jurisdiction

over a federal reclamation project under §8 of the Federal

Reclamation Act, a provision virtually identical to §27 of

the Federal Power Act. Without guidance from this Court

the principles articulated in California will be improperly

circumscribed.

Furthermore, the decisions below rely on First Iowa

Hydro-Electric Coop. v. Federal Power Commission, 328

U.S. 152 (1946), for a holding it did not make. Whether the

a8)

ae |

holding in First Jowa should be a

jurisdiction without regard to any conflict with FERC’s

jurisdiction is a question of extreme importance to the

states.

Basic to any consideration under the Supremacy Clause

is ‘‘the assumption that the historic police powers of the

States were not to be superseded by the Federal Act, unless

that was the clear and manifest purpose of Congress.”’ Rice

Santa Fee Elevator Service Corp., 331 U.S. 218, 230

(1947); Maryland v. Louisiana, 101 S. Ct. 2114, 2129

(1982). Federal regulation of a field does not in and of itself

manifest congressional intent to pre-empt state regulatory

Growers, Inc Paul

power. Florida npatee and Avocado é

3/0 US. id 142 (1963); Merrill Lynch, Pierce, Fenner &

Smith v. War — U.S. 177, 139 (1973). Rather, pre-emp-

tion occurs only where either “‘the nature of the regulate

subject matter permits no other conclusi 2

Congress has unmistaka bly so ordained ;

Transportation v. Kalo Brick & Tile, 450 U.S. 311, 317

(1981); Florida Lime and Avocado Growers, Inc. v. Paul,

373 U.S. 132, 142 (1963).

Congress did not, in the Federal Power Act, unmis-

takably ordain that federal jurisdiction was exclusi

fact, Congress ecie ty recognized and ‘“‘ordained”’ the

current jurisdiction of the states. S 9(t

eral Power Act, 16 U.S.C. §802, requi

federal license to submit pvicininl _ t they hav

with state laws with respect to the “use of ¥

purposes and with respect to the rig ight to engage in th

business of developing, transmitting, and di uti

power; ...’. Section 27 of the Federal Power A \

the states’ jurisdiction over the control, appropriation, use

and distribution of water.

The regulations issued under the provisions of Sections

ran

9(b) and 27 are even more explicit, requiring an applicant

for a federal license to submit copies of:

‘|, . special hydroelectric, waterpower, or irrigation

laws of the State or States involved [which] pertain to

the construction of the applicant’s project...” 18 C.F.

R. §4.41 (1978).

An applicant is further required to submit:

‘“lelvidence that the applicant has complied with the

requirements of the laws of the State or States within

which the project is to be located with respect to bed

and banks and to the appropriation, diversion, and use

of water for power purposes and with respect to the

right to engage in the business of developing, trans-

mitting, and distributing power, and in any other

business, necessary to effect the purposes of the license

applied for, including a certificate of convenience and

necessity, if required. This evidence shall be accom-

panied by a statement of the steps that have been taken

and the steps that remain to be taken to acquire

franchise or other rights from States, counties and

municipalities before the project can be completed and

put into operation.” Jd. (emphasis added).

As discussed above, a certificate of public good issued

under §248 is a “certificate of convenience and necessity”.

It is a general rule that the construction given by a federal

agency of the Act it is charged with administering must be

given considerable weight. California v. United States, 438

U.S. 645, 676, n. 30 (1978). Ignoring that rule, the courts

below construed the Federal Power Act in direct conflict

with FERC’s own regulations.

Review by this Court is required to decide whether the

decisions below improperly subvert the regulatory scheme

adopted by FERC and create an infringment of the rights

of the states which Congress never considered. It is also

required to decide whether the holding in First Jowa Hydro-

Electric Coop. v. Federal Power Commission, 328 U.S. 152

(1946), was improperly extended.

The courts below relied on First Jowa for their holding

that the licensing jurisdiction of FERC is exclusive of all

authority of the Board to issue a certificate of public good

under §248. But neither First Jowa, nor any other decision

of this Court, has held that FERC’s licensing jurisdiction

under the Federal Power Act is exclusive of all review

responsibilities whatsoever of the states. One of the two

holdings in First Iowa was that Iowa’s statute was void

because it directly conflicted with licensing under the

Federal Power Act. Jd. at 166, 167. The Court held that

“{tlhe detailed provisions of the Act providing for the

federal plan of regulation leave no room or need for

conflicating state controls.” Jd. at 181 (emphasis added).

The second holding was that the Federal Power Commission

did not have to defer to state permit and licensing require-

ments prior to issuing its license. Jd. at 170.

In contrast to First Jowa, the issue here is not whether

state law can prevent the issuance of a federal license; the

Board is not arguing that FERC is precluded from issuing

its license absent Board certification under §248. The only

issue is whether Board jurisdiction under §248 is totally pre-

cluded by FERC’s licensing jurisdiction where there is no

showing that the exercise of that jurisdiction will conflict

with or impair FERC’s licensing authority. This Court has

not decided that issue.’

3 Language in Federal Power Commission v. Oregon, 349 US.

435, 450, n. 24 (1955), supports the conclusion that state laws which

are not in conflict with the Federal Power Act are not superseded.

, , , r oa . , , wore 1 ian " a

There the Court stated: w]hile we hold that such approval [by the

Oregon Hydroelectric Commission] is not necessary [ federal ]} ‘

regon yaroeiectric Commission} 18 not necessary [to lederal licen

sure], there is no reason why the company should not seek state as

well as federal approval of the project”. Jd. The state approval sanc-

tioned in Oregon would be nonsensical if all jurisdiction rested in the

federal government.

The extension by the courts below of the holding in

First Iowa to preclude all state jurisdiction to issue a certifi-

cate of public good conflicts with the principles set forth in

California v. United States, 438 U.S. 645 (1978). It is of

fundamental importance to the states that this Court define

the contours of the California decision as it relates to First

provisions of the Federal Power Act.

In California, this Court found that §8 of the Federal

Reclamation Act reserved to the states the power to impose

any condition on the “control, appropriation, use or distri-

bution of water” through a federal reclamation project that

is not inconsistent with clear congressional directives. Jd.

at 6/2, 674-75. Because §27 of the Federal Power Act is

virtually identical to §8 of the Federal Reclamation Act and

Vermont’s §248 is substantially similar to the state law at

issue in California, a like result should be required here.

Both the statute at issue in California and §248 au-

thorize the issuance of a state permit based on a determin-

ation that it will serve the “public interest” or ‘public

good”. Both set up a general system of state regulatory

review and control of the entire project. Both states include

in their determination such local concerns as water purity or

quality, the environment, aesthetics and recreation. Many

of the conditions imposed by the California State Water

Resources Control Board on the operation of the New

Melones Dam and the state concerns they illustrate, are

precisely the kind of conditions and concerns contemplated

by §248. See, California v. United States, 438 U.S. 645,

652, n. 7, 8 (1978).

If §8 of the Federal Reclamation Act of 1902 authorizes

the issuance of a permit by the California State Water

Resources Control Board, then §27 of the Federal Power

Act, which is virtually identical to §8, authorizes the issu-

ance of a certificate of public good by the Vermont Public

Service Board. If California’s statute was construed as

relating to the “control, appropriation, use, or distribution

of water’, saved from pre-emption under §8, the substantial-

ly similar Vermont statute requires the same construction.

This Court has specifically found that the language

contained in §27 and §8 saving from pre-emption state laws

relating to the “control, appropriation, use, or distribution

of water” has the same meaning as it appears in all of the

federal Acts. First Iowa Hydro-Electric Coop. v. Federal

Power Commission, 328 U.S. 152, 177 n. 20 (1946). The

decision in First Jowa stated that “the use, in §27 of the

Federal Power Act, of language having a limited meaning

in relation to proprietary rights under the reclamation law

...@arries that established meaning of the language into

the Federal Power Act in the absence of anything in the

Act calling for a different interpretation of the language.”

Id. Notwithstanding that admonition, the courts below

found that §8 and §27 must be given radically different

meanings and that §27 must have the meaning discarded in

California v. United States.

Not only do the decisions below directly conflict with

this Court’s statement that §27 and §8 have identical mean-

ings, they also ignore that, historically, this Court had

interpreted the two sections in exactly the same way. In

numerous cases prior to California, both sections had been

construed extremely narrowly, saving from federal super-

sedure only state laws relating to proprietary rights. The

first case to so interpret §27 was First Iowa Hydro-Electric

Coop. v. Federal Power Commission, 328 U.S. 152, 176

4 Similar language had been incorporated by Congress in §14 of

the Ferris Bill of 1914 (H.R. No. 16673, 63d Cong., 2d Sess.) and in

§13 of the Ferris Public Lands Bill of 1916 (H.R. No. 408, 64th Cong.,

Ist Sess.).

(1946), where this Court observed that §27 of the Federal

Power Act referred primarily, if not exclusively, to proprie-

tary rights for ‘“[t]here is nothing in the paragraph to sug-

gest a broader scope.” The same interpretation of §27 was

applied in the decisions in Federal Power Commission v.

Oregon, sh U.S. 435, 445 (1955), and Federal Power Com-

mission v. Ni iagara Mohawk Power Corp., 347 U.S. 239

(1954).

This Court had given the identical interpretation to §8

of the Federal Reclamation Act. The decision in Jvanhoe

Irrigation District v. McCracken, 357 U.S. 275, 291-92

(1958), stated:

“Tals we read §8, it merely requires the United States to

comply with state law when, in the construction and

operation of a reclamation project, it becomes necessary

for it to acquire water rights or vested interests therein.

We read nothing in §8 that compels the United

Sta tes to deliver water on conditions imposed by the

State.”

That interpretation of §8 was reaffirmed by the Court in

City of Fresno v. California, 372 U.S. 627 (1963), ant in

Arizona v. California, 373 U.S. 546 (1963).

Thus, prior to California v. United States this Court

had consistently followed the interpretation that §8 and §27

related only to proprietary rights. In contrast, California

held that, under §8, reclamation projects were subject to

the dual control of California and the Federal Bureau of

Reclamation, and California was authorized to require a

state permit with twenty five conditions attached.

That §27 and §8 should be given radically different

meanings from one another, after almost 40 years of having

been interpreted in the same manner, cannot be justified

merely by the fact that the two sections are contained in

different Acts of Congress. While the two Acts clearly have

very different purposes and histories, those differences do

not suggest, much less require, the attribution of totally

different meanings to nearly identical provisions relating to

the saving of state law.

CONCLUSION

For the foregoing reasons, a writ of certiorari should be

issued to review the judgment and opinion of the Court of

Respectfully submitted,

Harriet Ann King*

King & King

Valley Professional Center

Waitsfield, Vermont 05673

Thomas Wies

General Counsel

Vermont Public Service Board

Counsel for Petitioners,

members of the Vermont Public

Service Board

Joseph E, Frank*

Paul, Frank & Collins

P. O. Box 527

Burlington, Vermont 05402

Counsel for the Petitioner,

Town of Cavendish

* Counsel of Record

APPENDIX

CONSTITUTIONAL, STATUTORY AND

REGULATORY PROVISIONS INVOLVED

United States Constitution, Article VI., Clause 2. Supreme

This Constitution, and the Laws of the United States

which shall be made in Pursuance thereof,.... shall be the

supreme Law of the Land; and the Judges in every State

shall be bound thereby, any Thing in the Constitution or

- =

Laws of any State to the ont trary notwithstanding.

United States Code, Title 28:

§2283. Stay of State court proceedings

A court of the United States may not grant an injunc-

tion to stay proceedings in a State court except as expressly

uthorized by ae of Congress, or where necessary in aid of

its Jurisdiction, or to protect or effectuate its judgments.

$2201. Creation of remedy

In a case of actual controversy within its jurisdiction,

. any court of the United States, upon the filing of an

appropriate pleading, may declare the rights and other legal

f any interested party seeking such declaration,

whether or not further relief is or could be sought. Any such

declaration shall have the force and effect of a final judg-

ment or decree and shall be reviewable as such.

§1331. Federal question

The district courts shall have original jurisdiction of all

civil actions arising under the Constitution, laws, or treaties

of the United States.

$1337. Commerce and antitrust regulations; amount in

controversy, costs

(a) The district courts shall have original jurisdiction

Constitutional, Statutory and Regulatory Provisions

Y g Y

of any civil action or proceeding arising under any Act of

Congress regulating commerce...

United States Code, Title 16:

§802. Information to accompany application for license

Each applicant for a license hereunder shall submit to

the commission —...

(b) Satisfactory evidence that the app! icant has com-

ane

plied with the requirements of the lav f the State or

States within which the proposed ite ct ie to be located

with respect to bed and banks and to the appropriation,

diversion and use of water for power purposes and with

respect to the right to engage in the business of developing,

transmitting, and distributing power, and in any other

business necessary to effect the purposes of a license under

this Act.

may require.

$821. State laws and water rights unaffected

Nothing herein [16 U.S.C. §§791la et seq.] contained

shall be construed as affecting or intending to affect or in

any way to interfere with the laws of the respective

relating to the control, appropriation, use, or distribu

water used in irrigation or for municipal or other uses, or

any vested right acquired therein.

United States Code, Title 43:

$383. Vested rights and State laws unaffected

Nothing in this Act shall be construed as affecting or

intended to affect or to in any way interfere with the laws

of any State or Territory relating to the control, appropria-

Constitutional, Statutory and Regulatory Provisions

tion, use, or distribution of water used in irrigation, or any

vested right acquired thereunder....

Code of Federal Regulations, Title 18:

§4.41 (1978).

[An applicant for a license from FERC is required to

submit copies of:]

.. special hydroelectric, waterpower, or irrigation

laws of the State or States involved [which] pertain to the

construction of the applicant’s project...”

[An applicant is also required to submit: ]

‘le]vidence that the applicant has complied with the

requirements of the laws of the State or States within which

the project is to be located with respect to bed and banks

and to the appropriation, diversion, and use of water

power purposes and with respect to the right to engage in

the business of developing, transmitting, and distributing

power, and in any other business, necessary to effect the

purposes of the license applied for, including a certificate of

convenience and necessity, if required. This evidence shall

be accompanied by a statement of the steps that have been

taken and the steps that remain to be taken to acquire

franchise or other rights from States, counties and munici-

palities before the project can be completed and put into

operation.”

Vermont Statutes Annotated, Title 30:

§248. New electric generation and transmission facilities;

certificate of public good

(a) No company, as defined in section 201 of this title,

or cooperative, may begin site preparation for or construc-

Constitutional, Statutory and Regulatory Provisions

tion of an electric generation facility within the state, or

electric transmission facility within the state which is de-

se } }

signed for immediate or eventual operation at any voltage or

ran)

fess

4ididl

exercise the right of eminent domain in connection with site

Pe eS hws GI

preparation for or construction of any such transmission or

oe - 7 3

generation fac ility, except for the replacement of existing

i +17 iis 17 ith fab anil Pan nrilitiac — +} ie eae eae A 1}

Taclilties W equivalent facilities 1n tne usual course of

? >* nr

shee siness, unless the and service board first finds that the

+ } e 4?

same will promote the general good of the state and issues a

1 s a * .

certificate to that effect. The publie service board shall hold

* - lal 7

a public hearing on ab petition for such finding and cer-

t ina ers in which any portion of the construction

reds) . ] } ee

facility is proposed to be located. Notice shal

council, state planning office, agency of transportation and

by goat wie mail

ser prior to the Pa 2aring. Notice of the public! f

be published in a newspaper of general circulation in the

county or counties in which the proposed facility will be

located two weeks successively, the last publication to be

at least 12 days before the day appointed for the genio

(b) Before the publ: ce

of public good, it shall fi

(1) will no

development of the

been given to the recommendations of the mun

regional planning commissions and the municipal

bodies;

unduly interfere with the orderly

7] ideration having

icipal and

Constitutional, Statutory and Regulatory Provisions

(2) is required to meet the need for present and

future demand for service;

(3) will not adversely affect system stability and

reliability and economic factors:

(4) will not have an undue adverse effect on es-

thetics, historic sites, air and water purity, the natural en-

.s .

vironment and the public health and safety

(5) plans have been submitted to the municipal

and regional planning commissions in accordance with this

section; and

; :

(6) 1s in compliance with the final plan approved

DY Q tit € tna

the oo under section 202 of this title, or tha

exists good cause to permit the proposed action.

UNITED STATES COURT OF APPEALS

For the Second Circuit

At a stated Term of +} c | Bi +o 1 States C rt? * \nneals

for the Second Circuit, held at the United States Courthouse

in sieath City of New York, on the 16th day of February, One

1¢ <7 +} e

PRESENT:

HON. WILLIAM H. TIMBERS,

HON. ELLSWORTH A. VAN GRAAFEILAND,

HON. THOMAS J. MESKILL,

TOWN OF SPRINGFIELD, VERMONT

VERMONT POWER SUPPLY . AUTHORITY,

Plaintiffs-Appellees

V. LOUISE McCARREN, ROSALYN L.

HU NNE M. AN andS SAMU ELS. BLOOMBERG,

members of the State of Vermont Public

Service Board,

Defendants-Appellant

TOWN OF CAVENDISH, VERMONT,

Defendant -lni fervenor

Appellant.

Qnard ang the T "°Yr + ‘axronodic!] \ . . qanr 9

Board and the Town of Cavendish, Vermont appea

summary judgment of the United States District Court for

rf)

whe hdenated * A Am eee

October 15, 1982, holding that the jurisdiction of the Federal

gulatory Commission to act on the Appellee’s

for a license to develop a proposed Black River

} -eriYr ) Atrir mr i+ tr’ ~ > ’ * rc +} 77373 el; \ y c

4 A* it ; + ; . + f C ae. eXc * ep e ) tne d lI iS 11¢ct1on » ne

7 S| | ag } 7°

and that, accordingly, the Board’s

Addigm li Vy, aa

% . 1° . rn >

ab river fF > 3f nar Tae: mIIPTreonTr 7 Yr} ‘TIN TION We TWeirnn) llega]

I Aidiinn 1c 4 fia Ctl nc urrent ’ Jr1isalic LiUli Was VW1ITNOUT iega

+ , ~

TOrE ay 1 eTTé ‘one

+ “* Va ee 7. ose we

‘ , 7 é )

a 2X, JULL id A Jidsd Adv LAVil ZLiAc ° ‘ iat

ala + me aia ™* + +7 + " .

the action was barred bv the Anti-Iniunction Act., 28 U.S.C.

9982+ that the Board 1) es en ey a.

~ 7 r yY 17 Tt ‘ r y han: 117 Y r > +?

L4600 sia iit Jai > £ ling was Iinaing upon tne Uis”

, Uf

YY _+ r yt > imn +? 5 MNOntriry , > ] + c hire —

trict irt under the doc e of res judicata and thus not

} . 17 + -+ +} +. ] ] . + 1 =

sublect to collateral attack hat the district court should

, 7 ,

Ot? ‘; ry r + +nrtn? . 1. +37 + - ] > 21%

have declined to entertain this action under the Younger

ar 7 + - n+ ‘ 1+ nF 5 str . 7 ° + Jr fc

absention doctrine: and that the authority of the Board was

| ) 7 7 oO _ St an. | .

* igre nari > ¢ ~or ° ) 72 > T

not preempted bv the Federal Power Act. See 16 U.S.C.

} 7

SO¢ VW Yr : 1] +} orr 1 y 7, nT sm lie r }

Aor r r > ? ¥ 5 “4 ’ - | ,

$82] e reject all these arguments substantially tor the

(

}

Juden

sane ee

Hon. William H. Timbers

Jide 4iiiGQiil . 44ii1/7U i

W311; ae

. iIliam H Timb re

8 11am : lmbpDers

s/Ellsworth A. Van Graafeiland

Hon. Thomas J. Meskill

s/Thomas J. Meskill

UNITED STATES DISTRICT COURT,

for the District of Vermont.

Civ. A. No. 82-157

filed October 15, 1982

TOWN OF SPRINGFIELD, VERMONT,

and Vermont Public Power

Supply Authority

V. LOUISE McCARREN, ROSALYN L. HUNNEMAN,

AND SAMUEL 8S. BLOOMBERG, in their

official capacities a

State of V ermon t Pu

Town of Cavenc

Defendant-Tnterventor:

s members of the

blic Service Board,

di sh

, Vermont

MEMORANDUM OF DECISION

HOLDEN, Chief Judge.

Plaintiffs in this action seek a declaratory judgment

that the Federal Energy Regulatory ——— has exclu-

sive jurisdiction over the licensing of the hydro electr

projet they propose to build, and the Vermont Pub! e Ser

vice Board’s order finding that it had concurrent caine tion

to issue a certificate of public good was beyond its jurisdic-

tion, illegal, and void. The defendant Public Service Board

members and the defendant-intervenor Town of Cavendish

contend the Public Service Board does have jurisdiction

over the licensing of the project, but they urge the court

not to reach that question. They argue that absence of

federal question jurisdiction, the Eleventh Amendment, the

doctrine of res judicata, the Anti-Injunction Act, and prin-

ciples of equity, comity, and federalism prevent the court

District Court Decision

from reaching the merits of the case. The defendants have

moved for a preliminary determination of the jurisdictional

issues, and the plaintiffs have moved for summary judg-

ment. The court concludes that none of the jurisdictional

barriers advanced by the Board members and Cavendish

precludes declaratory relief on the merits, and the plaintiffs

are entitled to summary judgment.

BACKGROUND

The Town of Springfield, Vermont, and the Vermont

Public Power Supply Authority have applied to the Federal

Energy Regulatory Commission (FERC) for a license to

construct and operate a hydroelectric project near Spring-

field on the Black River, a navigable river. FERC has taken

jurisdiction and is considering the application.

On January 25, 1980, the Town of Cavendish petitioned

the Vermont Public Service Board for a declaratory ruling

that the Black River was subject to the Public Service

Board’s jurisdiction. The Town of Springfield appeared as

respondent before the Board, and the Concerned Citizens

of the Black River Valley were allowed to intervene. In an

order dated April 7, 1982, and filed April 8, 1982, a majority

of the Public Service Board ruled, 2-1, that it had jurisdic-

tion over the project. Petition of the Town of Cavendish,

P.S.B. Docket No. 4444 (April 8, 1982). The Board’s order

also forbade Springfield from commencing site preparation

until the Board had issued a certificate of public good. /d.,

slip op. at 4. Defendant Samuel Bloom erg was the dissent-

ing member of the Board.

Springfield did not appeal the Board’s ruling to the

Vermont Supreme Court. On May 4, 1982, the plaintiffs

brought this action against the Public Service Board. The

10a

District Court Decision

“

awéte s&s -

parties filed extensive briefs, and on July 30, 1982, the court

heard oral argument on ior defendant’s application for a

preliminary determination of jurisdiction and the plaintiffs’

Vr iddesesiast ¥ UCC LLL) J

y+ ne 0 —<- a "i O - a 9 h

motion [tor summary uagment. n August 3, 1982, tne

ah A ei mes ‘i = } : ye ,

court granted the plaintiffs leave to amend their complaint

ie 43 _ } Bc nee ‘ } . . me ee

to substitute the individual Board members as parties de-

DISCUSSION

I. JURISDICTION AND RELATED ISSUES

The court turns first to the jurisdictional challenges

advanced by the Board members and the Town of Caven-

dish as intervenor.

rendish and the Public Service

t this court is without subject

matter jurisdiction. This argument must be rejected. As

Judge Coffrin held in an earlier action for declaratory and

injunctive relief brought by these same plaintiffs against

another Vermont state agency that sought to exercise ges

dicion over the Black River project, “it cannot seriously be

doubted that the federal preemption issue here ‘arises under

the Constitution, laws, or treaties of the United States’ so as

to establish federal question jurisdiction under 28 U.S.C.

§1331.” Town of Springfield v. State of Vermont Environ-

mental Board, 521 F. Supp. 243, 248 (D. Vt. 1981).

That the federal question presented here could pos-

sibly arise as a defense to some state court action is not

controlling. “[I]f there is never (federal) jurisdiction when

a state defendant has a dispositive defense grounded in

federal law, the Anti-Injunction Act would be surplusage.”

United Air Lines, Inc. v. Division of Industrial Safety, 454

U.S. 944, 949, 102 S. Ct. 485, 488, 70 L.Ed.2d 255 (1981)

lla

District Court Decision

(opinion of White, J., dissenting from the denial of cer-

tiorari). The plaintiffs’ claim here is that a federal a

has exclusive jurisdiction. This is a proposition of

law that the plaintiffs have a right to test in f

The Declaratory Judgment Act was intended © provide

such plaintiffs as these a tool that they might us

the validity of propositions of federal law — assuming, o!

course, that a ripe and justiciable controversy exists for the

court to a Lane Act “exists as an . strument to

ia?)

ce?

>, o>

or facloral law.”” Public poi ice Com igang v. Wycoff Co.,

344 U.S. 237, 250-51, 73 S. Ct. 236, 243, 97 L.Ed. 291 (1952)

(concurring opinion of Reed, J.).

The Wycoff case is one of the leadin

the Declaratory Judgment Act. In Wyco.

tion picture films and newsreels sought a declaratory ju

ment that it was engaged in interstate commerce, and an

injunction perpetually forbidding the Public Service Com-

mission of Utah from “interfering” with its activities on

routes authorized by the Interstate Commerce Commission.

The plaintiff offered no evidence at trial of any past, threat-

ened, or pending interference, and limited its proof to

showing that it was engaged in interstate commmee. /d., 344

U.S. at 240, 73 S.Ct. at 238 (opinion of the Court). The

trial court Baad that no interference had been made or

threatened. /d. Consequently, the Supreme Court held

that there was no showing of that danger of irreparable in-

jury which is necessary to equitable relief by injunction.

Id. at 240-41, 73 S.Ct. at 238. To the Court, it appeared

that that plaintiff (the respondent on appeal) had “aban-

doned the suit as one for injunction but |sought) to support

it as one for declaratory judgment.” /d. at 241, 73 S.Ct. at

cases construing

a carrier of m

ff,

—)

12a

District Court Decision

939. The Court accordingly directed its attention to the

prerequisities for jurisdiction in a declaratory action.

The Court found the “disagreement” between the

parties was too “nebulous,” id. at 244, 73 S.Ct. at 240:

The complainant in this case does not request an

adjudication that it has a right to do, or to have, any-

thing in particular. /t does not ask a judgment that the

Commission is without power to enter any specific

order or take any concrete regulatory step. It seeks

simply to establish that, as presently conducted, re-

spondent’s carriage of goods between points within as

well as without Utah is all interstate commerce. One

naturally asks, “So what?” To that ultimate question

no answer is sought.

Id. (emphasis added).

Because the question as to whether the Wvycoff

Company was engaged in interstate commerce was too

abstract, unripe, and meaningless except as a defense to a

possible state action, the Court ordered that the case should

be dismissed. The opinion contains a widely-quoted but

somewhat ambiguous dictum:

Respondent here has sought to ward off possible ac-

tion of the petitioners by seeking a declaratory judg-

ment to the effect that he will have a good defense when

and if that cause of action is asserted. Where the

complaint in an action for declaratory judgment seeks

in essence to assert a defense to an impending or

threatened state court action, it is the character of the

threatened action, and not of the defense, which will

determine whether there is federal-question jurisdic-

tion in the District Court. If the cause of action, which

the declaratory defendant threatens to assert, does not

13a

District Court Decision

itself involve a claim under federal law. it is doubtful

if a federal court may entertain an action for a declara-

tory judgment establishing a defense to that claim.

This is dubious even though the declaratory complaint

oe |

sets forth a claim of federal right, if that right is in

reality in the nature of a defense to a threatened cause

of action.

Id. at 248, 73 S.Ct. at 242.

While the Court did no more than express doubts about

the existence of federal question jurisdiction in such eases.

see United Air Lines, Inc. v . Division of ial Safet:

supra, 454 U.S. at 949-50, 102 S.Ct. at

White, J., dissenting from the denial of cert

courts have since adopted the dictum as a :

that no federal question jurisdiction ciated n particular

settings. There is, however, a split of authority

proper interpretation and application of the Wycof

Some courts have held that, while federal question Scien

tion is lacking where the declaratory plaintif seeks a dec-

laration of federal rights that has no meaning apart from a

state court action, federal question j ctl ]

where the declaratory plaintiff has an actual and present

controversy with the declaratory defen a s

declaration of federal law that has meaning in ie —— of

any state case, even though the federal right might also be

asserted as a defense in a state case. In cases : ee the

declaratory plaintiffs challenge state regulatory schemes on

federal preemption grounds, these courts hold that federal

question jurisdiction exists if there is a ripe and justiciable

controversy and the declaratory plaintiffs are subject to

conflicting state and federal regulation, even though the

declaratory plaintiffs may be defendants in state court

actions. A second body of precedent holds that federal pre-

oe ia =

. |

Lar |

l4a

District Court Decision

emption can only be in the nature of a defense to a state

court action and provides no PR RP basis for fediasd

question jurisdiction in a suit for a declaratory judgme

The First and Fifth Circuits, and, with one aberration,

the Ninth Circuit, have adopted the first approach; the

Sixth, Eighth, and Tenth Circuits have hewed

approach; the Third Circuit, after expressly reserving de-

cision, also appears to have taken the latter approa h: and

the Second Circuit has apparently not yet spoken.* See

** . ’ %

~ ~ ti-e

1 While the court ha

} re

c “At nn {Oorq) n1ItHoF

case aiscussing lecderai questio

c nging state reculati

4 g ate regulat

; + ‘ “

ehaned 2) t ?; + tre , year - a m9 .

enge to the vVallalty Of a pate

sae’

Bi ertington Industries, Inc..,

404 U.S. 1019, 92 S.Ct. 684, 30 L.Ed.2d 668 (1972). Under these cir-

cumstances, the Third Citeuit held, invalidity of the pate

could only arise as a — se t

31. The Bb C. Cir subsequently critici

Chemical Corp. as ‘Meies “Oo

Millard, 531 F.2d 583

anilasneor 3A eT h ey

in Warner-Jenkinson, did not definitively adopt the position of

the Third Circuit or the D.C. Circuit:

phe

Ls)

bo |

Tf)

ca)

oe |

boty ct >

ty)

i o | A } £ + ae

If the plaintiffs were seeking a declaration of their right to assert

patent invalidity as a defense to a contract action for royalties,

which itself could not be brought in federal court [citations

& Loan Association v. Greenwald, 591

Cir. 1979): Braniff International,

ervice Commission, 576 F.2d 1100,

8): Conference of Federal Savings and

etn, GO4 F.2q 1256, 1259 (9th Cir.

}.5. 921, 100 S.Ct. 1904, 63 L.Ed.2d

ching Co. v. Becker, 530 F.2d 1295

nom. Jones v. Rath Packing Co.,

- mhHcaPr 1urisaiction

4 pa

ows ‘ ‘ ee ‘ ’

_ tad faodara auestion irisdiction Id

V pds dc he sl OLA,

sed Shall. Oi) wo Philbins

‘ i ok eng mee

. + ( C if on O4 » ¢ho

s.Ct. 876, 879, 94 L.Ed. 119 yr the

tor aeciaratorv judgment may be Drougnt in

d a

hiv iit I WOuld @€XISL a DASIS ior Tederal

set between the narties Varner-Jenkin-

86. The Skelly Oil Co. Court had articulated

ratory Judgment Act). a federal court manuslel

iafratory vuagMenNnt , @ reaera: COUITt Would

nt? +

za UV Gt

=: rom ¢

eT ¢ )

~~se ” ee Ae ae

ense of Té

. we WA SON ~

a : , ~ ; 4 }

+7 a ¢ tore sTathiaa | no 2. nliaratart Thy) wT.

LO @ ICUCIa!l CUUTL. iit I CClialalOly vd uag

“ 5S

, - ; . : . }

sat ¢m~ F _—— mm Kr

Gitek WA UK V¥Gan &F FY

. ; . +

treme KO TYR 4yQtD

( aU MIC ULaLe

tne anf imenietior

€s Of jurisaicrion

16a

District Court Decision

430 U.S. 519, 97 S.Ct. 1305, 51 . Ed.2d 604 (1977); but cf.

United Air Lines, Inc. v. Division of Industria! Safety, 633

F.2d 814 (9th Cir. 1980), cert. pee 454 U.S. 944, 102

S.Ct. 485, 70 L.Ed.2d 255 (1981). Contra, Exron Corp. v.

Hunt, 683 F.2d 69 (3d Cir. 1982); Michigan Savings ia

Loan League v. Francis, 683 F.2d 937, wantin (6th Cir.

1982) (2-1) ;? Lawrence County v. State of South Dakota,

wed

matters which alone Congress had auth

to adjudicate — were no

Skelly Owl Co., supra,

Law Review note cited

at 674, 70 S.Ct. at 880,

le > ott “ ate

claratory suit is proper

e ] litigation san

parties if a declaration is refuse Lat ji

claratory Judgments — 1941 - 1949, 62 Harv.L.Rev. 787, 794 (1949

Adopting this line of analysis, the court finds it need not deter-

mine at this point whether the plaintiffs currently have a good coercive

cause of action — that is to say, whether they are now entit.ed to in-

junctive relief — because it is relatively certain that in the absence

of declaratory relief, the plaintiffs would eventually satisiy tne pre-

requisites for injunctive relief.

2 The majority in Michigan Savings and Loan League, supra, cited

Williams v. First Federal Savings and Loan Association of Arlington,

651 F.2d 910 (4th Cir. 1980), for the proposition that the Fourth Cir-

cuit has joined the Eighth and Tenth Circuits in holding ~ federal

pre-emption cannot form the basis for a declaratory action in eder-

al Courts. See Michigan Savings and Loan League, supra, voy F.2d at

962. This interpretation of Williams is highly questionable. The

Fourth Circuit, in Williams, in fact took jurisdiction over the case but

found it unnecessary to reach the question of federal preemption be-

cause it resolved the suit on state law grounds. Williams, supra, 651

F.2d at 921-23. While the Williams court expressed some doubts as

to federal question jurisdiction in the case, it proceeded on the belief

17a

District Court Decision

668 F.2d 27, 30-32 (8th Cir. 1982); Home Federal Savings

and Loan Association v. Insurance Department, 571 F.2d

423, 426 (8th Cir. 1978); cf. Madsen v. Prudential Federal

Savings & Loan Association, 635 F.2d 797, 803-04 (10th Cir.

1980), cert. denied, 451 U.S. 1018, 101 S.Ct. 3007, 69 L.Ed.2d

389 (1981). See also Trent Realty Associates v. First

Federal Savings & Loan Association, 657 F.2d 29, 34 (3d

Cir. 1981) (“We need not decide whether an original action

by First Federal in which the complaint specifically referred

to the federal regulations and sought declaratory and in-

junctive relief on the ground of federal preemption could be

maintained in federal court’’); compare Allegheny Airlines,

Inc. v. Pennsylvania Public Utility Commission, 465 F.2d

237, 241 (3d Cir. 1972), cert. denied, 410 U.S. 943, 93 S.Ct.

1367, 35 L.Ed.2d 609 (1973) (dictum implying no federal

jurisdiction would exist but for diversity of parties), with

National State Bank v. Long, 630 F.2d 981 (3d Cir. 1980)

(assuming Jurisdiction sub silentio on facts virtually identi-

cal to those of Conference of Federal Savings and Loan

Associations v. Stein, supra, in which the Ninth Circuit

upheld jurisdiction, and Michigan Savings and Loan League

v. Francis, supra, in which the Sixth Circut found there was

no jurisdiction).

In First Federal Savings & Loan Association v. Green-

wald, supra, the First Circuit held that federal question

that al! of the cases consolidated for decision properly raised a federal

question. Jd. at 913 n. 2. Indeed, the Williams case was cited by the

appellee, First Federal, in Trent Realty Associates v. First Federal

Savings and Loan Association, 657 F.2d 29 (3d Cir. 1981), as support

for the proposition that federal question jurisdiction existed in that

case, in which First Federal had won a summary judgment on the

merits in the district court. The Third Circuit found it difficult to

parse the Williams decision. Trent Realty, 657 F.2d at 35.

. }

ftitiiteri

eb2UUAENSSA GC WK

re)

po:

in vioiation oO! Ut al inking iaw

definition of “branch bank’ arises und

} % & ) {} r 1 \ 4

land. 356 F 2d 44) } > 1G66

- > , ‘

1588, 16 L.Ed 2d 674 (1966 state s

hitration of ee eae aeenciaa

empts state law Teamsters

ruction of branch bank allegedly

. an 7

aintiecs ugcht

JisAsiivliilsS Oug 4

Nite Nee

QGilAiilix£ iT HR sO10”"

n, 457 F.2d 820 (10th Cir.

rt. demed, 384 U.S. 961, 86 S.Ct.

’ =|

? i 4 rT Orrier “TY? ¥ ee Qe

; Ct TI), é wing al

| Pidiit, Wid

- 4 . .

y removed because federal labor

116 v. Fargo-

558 (D.N.D

1980) (state

19a

District Court Decision

eof e) TAN - ] faq al tec1pa]e

itihe matter of preemption and related federal issues were

a yea ; hides sales peek leu

the focal point of declaratory judgment suit, hence

. bd 7

estion Jurisdiction existed in that case under any

analysis.’ Id. (footnote omitted).

ey)

Al |

Similarly, in Rath Packing Co. v. Becker, supra, the

Ninth Circuit held that the district court had federal

. REEL LO PO OES aoe eh NONE Mel Ntbmninh Maem Cone eames

quest lon Jurisdiction over a suit in whch a bacon processor

oe 4 e o

suit, f entoreec ent of han avhsteatiam emeann ela nrar t* FOMAT.

ww ie awe aaa . aaa ae Ja ao Js tae 4 mit - + . \ oe + wee °

ed) irst Federal S , & Loan A tror * Jacl n a ae

} eh Ob Vi4C Ue source {jo & yi aa / at vu / v

re + ; , . .

tf mot Federa Cnsermre f, ae j 5 $4 y ae 2 wfows . me - “\r

a ew ENA bh © Se “ hit £406 t 44 . \< =a a on And >

‘ on * } — 7 ’ r etate

EXDTesSs!y is ] Tt] ’ seis ait

CO? y +++ ‘ 1 wen, - * oa oe

Jia} 4d 4 i ‘ A a

ot wy: > > ” S nee . ze + “~<s

L wg oe 8 GD | avis SA diig A 4 = JSG ‘

— — y .

seciicine es ie wi Céad Fs = nar

i 3 } é

> } PCRULALIVUUS), wtace s¥€ £GTH U. & a6

ae a 4 41¢ , < - = ~ - , « a s ‘

( ~ “IInr 99° (S D.N.Y O77; tata 9% «6 AIIKNGCom OAT cata

a oF LU OUDD. £40 bs a. 1940 Slate sibs SUUEEU Vik SLL

+ + + — od ¥ +24 + ° ¥ t we “ r * ’

~ f ~ { os }

LAUULOlTyY 20nd Con sUUlsUid ava si ie ‘ . a aus

¥ + .

* .

¢ “

r - > TF ‘ Mroor nmtort ¢ .* ¥ e+ + > wn z - ’ . -

<-> ~ we acer ~~ + be we we eee ILE ” ~ ee we ave? ~~ + - ~ be 468 = om e+ = ae lined

i é = :

“ é a - ‘ y 2

[Te j I 4 A A j

N_DII1.1973 ake ante

ree © Pe Oo ee So TF <a eae

rey ’ “ ~ me 15% :

~ r S

aVUisea Ad asaVis UL 2sssUsd

, r eS tine

eA = . as acer? + we ue wee a

~r rr ¥

. - P

. y f? y ~+ Shoe recon

Yue at 4/44 Pap | € \ of

Re - QR a+ .

’ S Pp s

Sth Cir. 1980 a it

F ‘ ’ y re por wort

AsUCits 4444 4 1/4 4 FY 4 Vidal ¥ UM

. wits in + matiire : «

} 3 e

iS Vllliy¥ idd LAID MGAlULe Vi

defense to the state suit): State v. American League of Professional

(

ie - ¢

sgaseball Clubs. 460 F.2c 654 (9th Cir. 1972 tat se allegin

F at Q > > wT Le

Baseball ths, t iy 65 { vai ad 1Yi2 (Slat case aii€ging V10-

lat ¢ tat ; £ - 3 led ed

intinne ; e > £ IP Pra: « rt atc } fl TTHMPANOFL .

ia@LIONS OI slate and federai ntitrust iaws heid improperly removed;

i i °

inee the «tate en} han +009 ram atroe facdar entitmiet me

since the state court had nc jurisdiction over federal antitrust claims,

4 * ’ .% ‘ .

he fadars antet ansla he: % 11tmerlietiAn ——- - ff ¢ha rlarme

Wie 1G@CQeTai COUFL COUIC Nave no g He doa LAU0li Uli removai Oi LiOSsSe ciaims,

? bi fe, j ean | mre * - + * ¢ ++ ¢ 4 f ~

ms, i@Cerai Dreemption 18s &4 matter of celiense

i i

to a state seit jin sae not a ground for removal,” id. at 660)

Marquette National Bank of Minne ~~ is v. First National Bank of

Omaha, 422 F Supp. 1346 (D Minn.1976) (state suit alleging, inter

alia, violation of Minnesota usury law held improperly removed; con-

20a

District Court Decision

sought declaratory and injunctive relief against the enforce-

ment of California’s meat labelling laws on the ground that

they were preempted by the Wholesome Meat Act of 1967,

21 U.S.C. §601 et seq., and a federal regulation promulgate

thereur ider. As in First Federal Savings & Loan, supra, the

course of events began with state ‘i bieecsiiia efforts. Sta

officials first ordered 84 lots of Rath bacon “off sale” for

short weight. Subsequently, they commenced litigation in

“fo

a Y

;

two state courts to enforce the state meat weight labelling

law. Rath removed both actions to federal district court and

also filed two declaratory judgment actions in federal] district

court. After the filing of the declaratory complaints, the

district court remanded the enforcement actions to the state

courts, but it later refused to dismiss Rath’s declaratory

suits. The Ninth Circuit affirmed the district court’s Juris-

dictional determination. Rath, supra, 530 F.2d at 1302-03.

The Court of Appeals in Rath contrasted the case with

Chandler v. O’Bryan, 445 F.2d 1045 (10th Cir. 1971), cert.

denied, 405 U.S. 1049, 92 S.Ct. 1310, 31 L.Ed.2d 592 (1972).

In Chandler, O'Bryan had brought a libel action against

Chandler, a United States district Judge, in state court.

O’Bryan alleged that Chandler had libelled him in state-

ments made to a newspaper. Chandler remove

to federal court, but the federal district court, finding that

the statements were not made in pe course of Chandler’s

official duties or under the color of his office, remanded the

tention that federal regulation of national banks preempts state

was a matter of defense) ; State of New York v. Local 115, 412 F Supp

720 (E.D.N.Y.1976) (if the plaintiff’s claim depends upon the con-

tinued vitality of state labor law, contention that federal labor law

had preempted the field was not enough to support removal).

Whatever the proper resolution of this issue may be, removal

jurisdiction is not implicated in the instant case.

2la

District Court Decision

case to state court, since there was no diversity of citizen-

ship. After O’Bryan won a verdict in state court, Chandler

sued in federal court for a declaratory judgment to set aside

the state judgment. The Tenth Circuit, reversing the trial

court, held that the federal courts lacked sul bject matter

jurisdiction, since “Judge Chandler’s assertion of judicial

immunity [was] ‘in reality in the nature of a defense’ to that

suit.” Jd., 445 F.2d at 1056.

The Rath court distinguished the two cases:

Unlike Chandler, Rath’s claims have vitality in the

absence of the litigation in state court: Rath had the

right to a federal forum before the institution of the

state court actions. Chandler’s federal claim was purely

in the nature of a defense to the libel action. Brought

without reference to the underlying state court proceed-

ing, Chandler’s claim would be a useless gesture: no one

would care whether Chandler acted under the protec-

tion accorded by the courts to his office if O'Bryan had

refrained from suing him. That Rath’s claim is or can

be the basis for a defense to the state court actions

states a mere truism; the test is whether Rath has

created a federal controversy where none existed or is

seeking an adjudication of a claim which is essentially

meaningful only when pleaded as a defense to the

particular pending state court actions.

Rath, supra, 530 F.2d at 1305-06 (footnote omitted). Be-

cause Rath was subjected to conflicting state and federal

requirements, there was a ripe and ongoing controversy that

gave rise to federal question jurisdiction. The Supreme

Court, in affirming the Ninth Circuit on the merits, did not

deem the defendants’ jurisdictional objections worthy of

discussion. Despite the fact that the jurisdictional issue had

been raised below and was addressed at length by the Court

: pa is - = ¢) = ee | One ats. , aes . *) Pe

Appeals, see id., 530 F.2d at 1302-06, both the Supreme

7 . . . . . , . °

—T mamritvy ang Thiet} ac ahr ~~ VII0+ ay { wt omar oe

Court sata jUlil’ and Justices Rehnq ASG Gil WLS Wart, GQis-

. . , 7 »* + } ’ ]

a r mn nart nrarocoran noireantiv ¢ tha YYT rit . it} iT

enting 1n part, proceeqaeda directiv to the merits wWlthoult

i .

questioning jurisdiction over the case. Jones v. Rat! Pae ch

ing Co., supra, 430 U.S. 519, 97 S.Ct. 1305, 51 L.Ed.2d 604

passim.

tions v. Stein, supra, Was simular to tnat Oo! t! e Co rt oO!

| co ;

Appeals in Rath. Stein was a challenge to state “anti-red-

. . * 7 . 74° os : — *

l ning reguiations Redlu ing 1s mortgage credlt dls-

o . : . a s . mt : = cae ° ae ae :

erlminé ation pased on the cnaracterstics of the nelgnoornooa

surrounding the would-be borrower's di elling. The Feders

ot 8 Ing ne wouid-bde borrower 8 aweiilnd. c eaera

Home Loan Bank Board had promulgated an ti-redlining

he Home Owners’ Loan Act of

] “y

regulations implementing th

1933, 12 U.S.C. §1461 et seg., and various federal ci. il rights

statutes. pone ifornia also adopted a statute that set up 4

detailed anti-redlining regulatory scheme. The plaintiffs,

all fed ae chartered savings and loan associa 1

] me . = ‘ a } g Pe BAe a Eo EI

for a declaratory judgment that the California Housing

1 Discrimination Act of 1977, as applied to them,

Financia I

}

& and regulations. The

maeiok by federal legis

defendant —— there was no federal question Juris-

is contention, 2 stinguishing

)

supra. Th .e court ected We tl

Wycoff on the ground that in tha cas “there was no proof

of any threatened or probable act by the state commission

which might cause the irreparable injury essential to equit-

able relief or which could serve to create the actual con-

troversy necessary for declaratory judgment jurisdiction.”

Stein, supra, 604 F.2d at 1259. The Stein court noted that,

as in First Federal Savings & Loan, supra, “ ‘Both the state

23a

District Court Decision

and federal regulations [were] currently in effect, subjecting

the associations to conflicting requirements,’ and accord-

ingly “[a] jn actual justiciable controversy [ was] thus pre-

sented.” Stein, supra, 604 F.2d at 1259. On appeal, the

Supreme Court suminarily affirmed. Stein v. Conference of

Federal Savings and Loan Associations, 445 U.S. 921, 100

S.Ct. 1304, 63 L.Ed.2d 754 (1980) (mem.).

In Braniff International, Inc. v. Florida Public Service

Commission, supra, the Fifth Circuit was also called upon

to construe Wycoff. The district court had dismissed the

case for want of subject matter jurisdiction, so the only

question on appeal was the existence vel non of federal

question jurisdiction. The facts were similar to those of the

instant case. The plaintiffs, six airlines, were required under

1 law to obtain “Certificates of Public Convenience

and Necessity” from a federal agency, the Civil Aeronautics

Board. The Florida Legislature passed a statute subjecting

airlines to further regulation by the defendant Florida

Public Service Commission. One of the plaintiff airlines

had failed to comply with a Florida Public Service Commis-

sion rule regarding notice of change of schedule. A state-

certified airline filed a complaint before that body, which

then issued an order that the offending airline, Southern

Airways, Inc., show cause why it should not be fined or

ordered to cease and desist from the offending conduct.

Southern, instead of complying with the show cause order,

oined with five other airlines in filing suit against the Com-

mission and its individual members in federal district court

for declaratory relief that the State regulatory scheme

violated the Supremacy Clause, the Commerce Clause, and

the Due Procss and Equal Protection Clauses of the Four-

teenth Amendment. The complaint also sought an injunc-

tion against enforcement of the state regulatory plan.

244

District Court Decision

The district court, relying on Wycof, dismissed the

'P}laintiffs have failed to make out a case for federal-

question jurisdiction. This action seeks merely to ob-

or plaintiffs a federal defense to the action pend-

ng before the Florida Public Service Commission. The

cause of action which defendants threaten to institute

vill involve only an issue of state law — whether plain-

tiffs should be required to comply with the PSC’s notice

provision. That a defense based on federal law will be

asserted is immaterial to the jurisdiction of this court.

ctr

bet «

Mt,

— a

Quoted in Braniff International, id., 576 F.2d at 1103.

The Fifth Circuit, ve 1king aioe Circuit Judge

Elbert Tuttle, reversed. At the outset, the court noted that

“during the 26 years since its de Ci nein in Wycoff, the Su-

preme Court has never invoked the rationable [of the

dictum in Wycoff}] to obtain the result reached by the dis-

trict court here.” 576 F.2d at 1104. Judge Tuttle conceded

that several courts of appeals had relied on the Wycoff

dictum to sustain dismissals for lack of subject matter juris-

diction. “However, the only common threat [ [sic] appearing

in these cases is the dearth of discussion and analysis.” Jd.

The court proceeded to identify several features of the

Wycoff case that limit the applicability of its dictum:

The Wycoff Court, with the benefit of a full trial record,

had determined on the merits that no injunction could

issue, since there was ‘‘no proof of any threatened or

probable act of the defendants which might cause the

[requiste] irreparable injury.” In the present case the

state, through the Commission, already had set in mo-

tion the very regulatory processes whose constitu-

25a

District Court Decision

tionality was challenged through appellants’ suit. As

developed by the pleadings and other matters thus far

a part of the record, it simply cannot be said that in-

junctive relief is foreclosed here as it was in Wycoff

Appellants’ suit. therefore, cannot be characterized as

nothing more than an attempt “to ward off possible

action of the appellees by seeking a declaratory jJudg-

ment to the effect that [they] will have a good defense

when and if” that action is taken.

}]

lants, whos

Nor can it be doubted that these appel

standing in this matter cannot seriously be questioned,

have not presented a true “case orc _ sage as re-

quired by Article III. That defect undoubtedly played

a crucial role in the judicial ia of the Wycoff

plaintiff's claim. Here, however, the circumstances

show that ‘‘there Is a — controversy, between

parties having adverse legal interests, of sufficient im-

mediacy and reality to warrant ‘relief.

]

Id. at 1105 (citations and footnote omitted) (bracketed

text supplied by the Fifth Circuit).

The Fifth Circuit concluded: ‘‘That appellants’ con-

stitutional claim is or may be a defense to the Commission's

actions states a mere truism: it is not, under the circum-

stances, a limitation upon the power of the district court

to entertain the controversy before it.’ /d. at 1106. It held

that where a party seeks declaratory and injunctive relief

against the enforcement of an unconstitutional state statute,

if the other requirements for the taking of federal question

jurisdiction are met, the “mere fact that the constitutional

claims might be raised before a state administrative body

26a

District Court Decision

charged with enforcement of the statute does not alone

depriv the court of jurisdiction.” Jd. (footnote omitted).'

Those courts of appeals that have held federal pre-

emption cannot form the basis for federal question juris-

diction in a declaratory action have rested their decisions on

the ground that federal preemption was ‘actually’ in the

nature of a defense to a state law claim. E£.g., United Air

Lines, Inc. v. Division of Industrial Safety, supra, 633 F.2d

at 817 (“United's allegations of federal question jurisdiction

in this appeal remain defensive in nature’). This reasoning

proves too much. Parties who object to state statutes, regu-

lations, or administrative rulings on Supremacy Clause or

other federal law grounds frequently prefer to bring antici-

patory challenges, for declaratory or injunctive relief, or for

both, rather than await the opportunity to make their de-

fense in state enforcement actions in which they face the

danger of punishment should their objections turn out to be

ill-founded. Cf. Ex parte Young, 209 U.S. 123, 165, 28 S. Ct.

441, 456, 52 L.Ed. 714 (1908). All such anticipatory, de-

claratory and injunctive actions are essentially “defensive

in nature.” Nonetheless, if the controversy is ripe and

justiciable, the federal courts have jurisdiction to declare the

rights of the parties.

4Here, the plaintiffs’ Supremacy Clause challenge is not directed

at a state statute, but an administrative ruling. This distinction does

not make the Fifth Circuit's analysis inapplicable. Moreover, though

plaintiffs seek only declaratory relief, plus “such other and further

relief as is just and appropriate,” it is “relatively certain,” see above,

note 1, that in the absence of declaratory relief the plaintiffs would

ntually

tua

have a coercive cause of action for equitable relief since,

as in Branif International, here the Public Service Board ‘ ‘already had

set in motion the

is challenged. Jd., 576 F.2d at 1105.

very regulatory processes’ whose constitutionality

District Court Decision

In the United Air Lines case, supra, United Air Lines

brought suit to enjoin the enforcement of California health

and safety regulations at United’s facilities at the San

Francisco International Airport. United alleged that the

jurisdiction of the Federal Aviation Agency over their

facilities was exclusive, and that California law was pre-

empted. The Court of Appeals reversed the district court's

grant of a preliminary injunction. Without citing either

Conference of Federal Savings and I

Stein, supra, or Rath Packing Co. v. Becker, supra, both

of which were recent Ninth Circuit precedents that had

been affirmed by the Supreme Court, the court held there

was no subject matter Jur sunmas ort “It is Ho bank aw

that federal jurisdiction must affirmatively appear in the

complaint.” United Air a s, supra, 633 F.2d at 81

is not saceed that a federal question appears in the com-

plaint as an anticipation of or reply to a probable defense

[citations omitted], or that the claim asserted is in

ture of a defense to a threatened or pending action.” /d. at

816-17.

The Supreme Court denied certiorari. United Air

Lines, Inc. v. Division of Industrial Safety, supra, 454 U.S

944, 102 S. Ct. 485, 70 L.Ed.2d 255 (1981). Justice White

dissented from this disposition of the case. He considered

the Ninth Circuit to have “confused two distinct lines of

reasoning.” Id. at 946, 102 S. Ct. at 486 (opinion of White,

J., dissenting from the denial of certiorari). One of those

lines was the familiar rule in the Mottley case, Louisville &

Nashville R. Co. v. Mottley, 211 U.S. 149, 29 S. Ct. 42, 53

L.Ed. 126 (1908), that a plaintiff cannot get into federal

court on the basis of a federal defense the plaintiff expects

the defendant to assert:

In each of the above cases [Mottley, Tennessee v.

28a

District Court Decision

Union and Planters Bank, 152 U.S. 454, 14 S. Ct. 654,

38 L.Ed. 511 (1894); Metcalf v. Watertown, 128 U-S.

586, 9 S. Ct. 173, 32 L.Ed. 543 (1888), [the federal

plaintiff's cause of action against the defendant was

not grounded in federal law; he merely sought to

adjudicate the validity of an anticipated defense to his

action. Here, United’s complaint, as I read it, included

the claim that under federal law the Federal Aviation

Administration had exclusive jurisdiction to oversee

safety at airline maintenance facilities and therefore,

under the supremacy clause, state regulation was fore-

closed. No part of this claim was grounded in state law.

United Air Lines, Inc. v. Division of Industrial Safety,

supra, 454 U.S. at 947, 102 S. Ct. at 487 (opinion of White,

J., dissenting from the denial of certiorari).

The second line of reasoning, Justice White wrote, sub-

stantially misread [the Supreme Court's] previous cases on

when the ‘defensive’ character of a federal question is in-

sufficient to create federal-court jurisdiction.” Jd. at 946,

102 8. Ct. at 486. He construed the dismissal in Wycoff to

have resulted “because the federal claim was too abstract.

anticipatory, and not ripe for decision.’ Jd. at 949, 102 S.

Ct. at 488. He criticized the holding of the Court of

Appeals:

The suggestion that a defendant in a pending or

threatened state action based on state law is foreclosed

on jurisdictional grounds from seeking a federal dec-

laratory judgment or an injunction based on the claim

that the state action is barred by federal statute or the

Federal Constitution makes little sense in light of the

holdings of this Court. Under the Younger v. Harris,

401 US. 37 (91S. Ct. 746, 21 L.Ed.2d 639] (1971), line

29a

District Court Decision

of cases, comity and federalism require a federal court

to hold its hand and dismiss rather than interfere with

a pending state criminal proceeding, by adjudicating a

federal defense that has been or might be raised in that

proceeding. Certain civil proceedings are subject to

the same rule. But these holdings do not rest on juris-

dictional grounds, and they do not apply when a state

proceeding is not pending and in any event do not apply

to all civil proceedings. Furthermore, if there is never

federal jurisdiction when a state defendant has a

dispositive defense grounded in federal law, the Anti-

Injunction Act would be surplusage. Under this theory,

all such litigants would be required to pursue their

federal claims in state court. Perhaps they should, but

that is not what the present jurisdictional statutes and

our cases construing them require.

In my view, the holding below is wrong. United Air

Lines, supra, 454 U.S. at 948-50, 102 S. Ct. at 488.

Counsel for the Town of Cavendish suggested at

oral argument that since Justice White failed to get three of

his colleagues to join him to grant certiorari, all eight re-

maining Justices approved the lower court’s reasoning.

There is no merit whatsoever to this contention. The denial

of certiorari means nothing other than that the Supreme

Court chose not to review the case. As Justice Frankfurter

once explained:

The sole significance of .. . denial of a petition for

certiorari need not be elucidated to those versed in the

Court’s procedures. It simply means that fewer than

four members of the Court deemed it desirable to re-

wiew a deeision of the lower evar wa uw maiier vi “suand

30a

District Court Decision

judicial discretion.” A variety of consider

lie denials of the writ, and as to the same petition

ane

different reasons may lead different Justices to the same

result . . . Narrowly technical reasons may lead tc

denials. Review may be sought too late: the judgme

of the lower court may not be final... A case may

raise an important issue but the record may be cloud

It may be desirable to have different aspects of an issue

further illumined by the lower courts. Wise adjudica-

tion has its own time for ripening.

Maryland v. Baltimore Radio Show, 338 U.S. 912, 917-18,

furter, J., respecting the denial of the petition for writ of

certiorari). The Supreme Court has since reiterated that it

is “well-settled’’ that a denial of certiorari imports no impli-

cation concerning its view of the merits. Hughes Tool Co. v.

Trans World Airlines, 409 U.S. 363, 366 n. 1, 93 S. Ct. 647,

650 n. 1, 34 L.Ed.2d 577 (1973).

As Justice White pointed out in United Air Lines,

supra, 454 U.S. at 948, 102 S.Ct. at 488, no Supreme Court

case has ever held that a federal court cannot take cogni-

zance of an action predicated on federal question jurisdic-

tion and seeking a declaration that federal law preempts

state regulations. On the contrary, the Supreme Court has

routinely heard cases asking for declaratory or injunctive

relief against state regulation alleged to be preempted by

federal law, and it has adjudicated those cases on the merits,

field Co., 435 U.S. 151, 98 S.Ct. 988, 55 L.Ed.2d 179 (1978) ;

Jones v. Rath Packing Co., supra, 430 U.S. 519, 97 S.Ct.

1305, 51 L.Ed.2d 604 (1977); Burbank v. Lockheed Air

Terminal, 411 U.S. 624, 93 S.Ct. 1854, 36 L.Ed.2d 547

41YId) , Pluridu Avucady Growers v. Paul, VID TR. UV, VY

3la

District Court Decision

S.Ct. 1210, 10 L.Ed.2d 248 (1963); Heinz v. Davidouwnrtz,

312 U.S. 52, 61 S.Ct. 399, 85 L.Ed. 581 (1941), cited m

United Air Lines, supra, 454 U.S. at 948, 102 S.Ct. at 488

(opinion of White, J., disenting from the denial of cer-

tiorari). Counsel has not called to the attention of the court

any Second Circuit case adopting the approach of the cir-

cuit court in United Air Lines, supra, nor has the court been

able to locate any such Second Circuit case. The court

chooses to follow the First and Fifth Circuits, see First

Federal Savings & Loan Association v. Greenwald, supra,

and Braniff International, supra; the two Ninth Circuit

precedents affirmed by the Supreme Court, Rath and Stein,

discussed above; and this District’s own precedent, Town of

Springfield v. State of Vermont Environmental Board supra,

and finds the reasoning of the circuit court in United Air

Lines, supra, unpersuasive. This case is “quite different

from Public Service Comm’n v. Wycoff Co., 344 U.S. 237,

73 S.Ct. 236, 97 L.Ed. 291, where a carrier sought relief in

a federal court against a state commission in order ‘to guard

against the possibility,’ id., at 244, 73 S.Ct. at 240, that the

Commission would assume jurisdiction.” Public Utilities

Commission v. United States, 355 U.S. 534, 538-39, 78 S.Ct.

446, 450, 2 L.Ed.2d 470 (1958). Here, as in Public Utilities

Commission v. United States, id., the Public Service Board

has already assumed jurisdiction. The court is satisfied that

the plaintiffs’ case rests on its own footing on a proposition

of federal law. The controversy is ripe and justiciable. Ac-

cordingly the court has jurisdiction under 28 U.S.C. §1331

to hear the case.

B. Sovereign Immunity

The defendants contend the court lacks jurisdiction

over the case because the Eleventh Amendment “bars suits

against members ot the Vermont Fublic service Boara

324

ict Court Decisio

oo;

el,

™ nag — pons iranang Ans ver to ) Fi rst Amended Com-

The Publ olic Service Board was initially impleaded as

the sole RES he Town of Cavendish urged that

sovereign immunity barred the suit. By order dated August

O¢ > . — 1. b | . -_. mu i is .

3, 1982, the court granted the plaintiffs leave to amend their

complaint to substitute the individual members of the

Board as parties defendant, since “the court decline[d] at

[that] stage to dismiss the case for technical reasons with-

out aff ene an opportunity to remedy the defect.” Town

of Springfield v. Sate of Vermont Public Service Board, No.

82-157, slip op. at 1 (D. Vt. Aug. 3, 1982).

— e can be no doubt that the Eleventh Amendment

is no bar to this suit in its present posture:

It is established that the Eleventh Amendment bars

unconsented suits against state agencies as well as

States, even where the relief sought is equitable in

nature. Alabama v. Pugh, 438 U.S. 781 [98 S.Ct. 3057

56 L.Ed.2d 1114] (1978) (per curiam). But it is equally

well established, and it is a bulwark of our regime of

rule by law, that courts have the power to restrain

lawless conduct by government officials. Ez parte

Young, 209 U.S. 123 [28 S.Ct. 441, 52 L.Ed. 714)

(1908); Association of American Medical Colleges v.

Carey, 482 F.Supp. 1358, 1361-62 (N.D.N.Y. 1980).

Thus any suit seeking only equitable relief against state

officials can be heard, provided the equitable relief

does not in fact amount to retroactive damages, Edel-

man v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d

662 (1974), if only individuals are named defendants,

and if there is an allegation of conduct that violates

state or federal law, cf. Cory v. White, — U.S. — , 102

8.Ct. 2325, 72 L.Ed.2d 694 (1982).

33a

District Court Decision

Town of Springfield v. State of Vermont Public Service

7 ?

The court now entertains some qd WOT as to wh etner

a4 447 ¥¥ Wed UWS 04 4248 . A - a

+} ] f sa ‘ oa . “ee ? }

ne doctrine Or soverelgn lImmunItv Was 2 Dar to tnis sult

bl | ‘7?

- 1 : ~— ) mre

even 1n its original posture. Cf. Missis Pa ad C'om-

a a ; w: m

MILZION 7 Ns nore Centra Inilrnad ('r L\2 T ~ ‘ 340

L oy) La 1Q oOo ot,

nIcnar , a 6 — . . ke hic +7 vy —. r

raised by the appellant is, that this sult is. in substance, one

. I

, * 7 a ats © i*- = * . ~ . . oo

against a state T} € cOMMIssl10ON Was created Dv the State

£ Vii } ] +} +] + F 34 debosd ]

c S a. mmmnror r } ’ } bd - % y my o?

i « me Sipp!i naer tne autnority oO: it ¢c PLALULIUL G A

] £ } . . ] .

lo eer . a . o A

laws, tor tne purpose oI supervising nd to some extent

77 } - “7 ] , ’

controliing. tne acts of rallroadqs wiltnin the State Suen a

ee ee - + + x 4 ' » aa ae A - is

‘ 9

COTY YY wer) *¢ evr 1BeT to > Cy11F — ) ( + 7 OY oye y , 4 +cae

JiLiiili kaa A ra be a 4 i a a

} ’ ‘ T ‘ >

{rrord Pre? foe 7 4} amnric Co IST ] n¢ ? ] T = 210 : 30

Pot a8 y “ awit wwi'), « ’

IC —_— -<c ~} - c : W

29 S.Ct of, £1, oe bE. 590 (1908) | { imeés 2 { €

marr add that w PY the te } Gvard a hill qaninest Fi CIT

aide A A 4ith aa ilt Tale he I1lX€ add Ly 2 € } vg

+ } } ¢ + 1)

“4 yO } . £ . .

mission to restraln the members trom @é! reing it Wl not

he han ¢ Qj? QTTOImM nT y) ? +y lac? lat} ¥ r ¢ saat arrair ~¢

i/ o" ‘ a wi er 2 “a4 a | 4 we BE 7 tf ti } e] ‘. { yd it nf" AB Do Lc w i‘ ee | ‘ Pa em ~~ Pi = i Gamadalii Mn v

ce as ee

a State, and will be the proper form of remedy’) (emphasis

?.3 } VW hs : . + a . 17 F ’ > as

aririert . PRI I: ; rT /177 27 ‘) 7 yr4Ot “wT

SUCCG i. i d q / ‘ # VU TitestOrm, Lt HUDD. gf,

> < 1¢ Tt? i i ig - a ai a a

29 (S.D.N.Y. 1935), aff'd per curiam on opinion below,

104 F.2d 1017 it Ci . 1939) (L. Hand, Swan, and Chase,

In any event, this suit as it is now cast against the

cc cael P) | OR i) oe -< Bog = one 1. i onl +h +

individual Public Service Board members is not within

: 4+ . i. tr o Tame cam ain i ~ tere ~ > »

the proscription of the doctrine of sovereign immunity ex-

et gl } eo , th

rat at 1Ee Kleven } nenrmer 1A AEC O

emplifed in the oe oatk Amendment. In the eves of the

law. illegal action bv state officials is not the action of the

ia ¥¥, illega On LsY weeeee VLLIViais &: Livyy Wit & iUil Ul ii

State. “[T]he use of the name of the State to enforce an

unconstitutional act to the injury of the complainants Is a

proceeding without the authority of and one which does not

affect the State in its sovereign or governmental capacity. It

s simply an illegal act on the part of a state otnelal...° AZ

34a

District Court Decision

parte Young, supra, 209 U.S. at 159, 28 S.Ct. at 453. De-

fendants’ Eleventh Amendment defense is without merit.

C. Res judicata

The Public Service Board defendants and the Town

of Cavendish urge that the Board's ruling is res judicata,

and therefore cannot be collaterally attacke ed. Judge

Coffrin, relying on Durfee v. Duke, 375 U.S. 106, 114,

84 S.Ct. 242, 246, 11 L.Ed.2d 186 (1963), rej jec cted a a similar

argument in Town of Sprin

fee, the Court recogn ized that ‘the general rule of finality

of jurisdictional determinations is not without exceptions.

Doctrines of federal pre-emption or sesh immunity

may in some contexts be sear al Durfee, 375 U.S. at

114, 84 S.Ct. at 246, citing Kalb ep ome 308 U.S. 433,

60 S.Ct. 343, 84 L.Ed. 370 (1940). and United States v.

United States Fidelity Co., 309 U.S. 506, 60 S.Ct. 653, 84

L.Ed. 894 (1940).

The Town of Cavendish contends that Judge Coffrin’s

reliance upon Durfee was “mistaken” because in neither of

the two cases cited by the Court was the issue of subject

matter Jurisdiction actually litiga _ in the first tribunal.

Intervenor's aeemorandure of on Defenses Exclusive

of Merits of the Plain oe s s Cla dat -d July 15, 1982, at

7, citing Durfee, supra, 375 U. t 114 n. 12, & S.Ct. at

247 n. 12.

The footnote the Town of Cavendish cites does not

support its argument. After noting that in neither Kalb v.

Feuerstein, supra, nor United States Fidelity, supra, was the

jurisdictional issue actually litigated, that footnote goes on

to set forth a multifactor test for exceptions to the finality of

Jurisdictional determinations:

ase

The Restatement of Conflict of Laws

the possibility of such exceptions:

anc eed d ¥

hor c + ’ . nado 131 . 7

Where a court has jurisdic

d th ii )\ Lid Aud

{ . ; that i+ } 7 h hy .

anr rryy?yY ¢ Tha ? YAS 1? i~ee rn "or , ?TeAnt

@aiits d e Lermines weieel 44 1iGS urisaiction OVEel tne Sul ect

+t ’ , . }

marTrTrar tT} nyyvar?t > 9 nN Yr ’ i;iaTara “Fr ¢ fTaniy ry ale

. LLer, LNe I jal cles Ca 10T couateraii\s attar * tne Juag-

} } | } ° .

Yr} Yy r r ." ’Y ] no ’ 5 ’Y nt + nMF not ?

ment ( tne PTOuU! Q tnat tne co rt uid A 4 U nave }Uur1s-

diction ¢ ver +} ea cit i¢ Pr mmarttar irr le ~ th > Ty) linac: YY 7

Aeuaad UVES Git wil | Ut 4cia ULSI, £ALiCOS WIC iS yi1C Add aer-

‘ s } } / . } : }

mrina tr 7 17) Try ? oT ~4 T1917 . 9 . 11 -~} y sc] = }

4 ¥Y 44h tne qgaoctl! ine Ol res J udicata 1S OULW elgned i/ ¥ tne

9° . * . ’ ’ }

NM Iew aveamnct MOrrTr it no tn rte FLO 9 + Moatnanr te

DOLICY &a&Zalnst permitting tne Court to act oevond Its

ePTON in ‘eeened +h TQ \ - arnrr kriarta tr ry Rigen

Ulli. JALiit = Lilc Tractors approp late tO ve con

‘

2 as cs lateral attack should t

dered in determining that collateral attack should be

ject mat-

‘ ~ L- Foy ,orty a — i, -

(a) the lack of jurisdiction over the s

‘(c) the court was one of limited and not of

general jurisdiction;

the question of jurisdiction was not actually

‘(e) the policy against the court’s acting beyond

its jurisdiction is strong.

Durfee, supra, 375 U.S. at 114 n. 12, 84 S.Ct. at 247 n. 12

iting Restatement, Conflict of Laws [Ist], §451(2) ( Supp.

1948).

Even if the Public Service Boa rd were a court, the

application of this five-factor analysis to the case at hand

would strongly indicate that the po olies ’ against permitting

it to act beyond its jurisdiction outw eighs the policy under-

lying the doctrine of res judicata. For the reasons given

below, the Board's lack of Jurisdiction 1s clear. ihe Juris-

36a

District Court Decision

dictional determination hinged entirely on a question of

law, since it is undisputed that the Black River is a navig-

able river. The Board is certainly not a court of general

jurisdiction. And the policy of nares preemption here is

strong. The only factor militating in favor of deference to

the Board’s ruling is that the iclinukion of jurisdiction was

actually litigated. Here, this is not enough.*

5 The Town of Cavendish cites the recent case of Insurance Corp.

‘ " x al 4 i 3 ADM a i Pn aan oz i d rnlw

of Tre! nd, Lt ih. ° ( mpagnié LES§ B i Lice E fz eo Ll o—_,

od L

n. 9, 102 S.Ct. 2099, 2104 n.9, 72 L.Ed.2d 492 (1982), for the proposi-

he er dims . bo thas i.’ ‘

a JQA0Y LIIGY to" eh | a ’ ee ce 42a

“

a ‘ ek 4 n ee

) ~ rf = ’ t , os r ¥ 5

Ul pe ORE GLC | 4 J U ce a8 Uucs

es ~— : aes + It SOEs

4 ‘ - ~ 4

vial i @ cCoiia a re% @lA UVUL, + MUS iis an ad ey

4 i ee ‘ i .

‘ a r mr Pree sarrgarneTrn ae , r i )

been Line Tru at p { 3s 0 ita a i 9 1uUTISG ona

rry r a+

determinations — both subject matter and person see (

rate Drainage Dist. 1 ok 308 US. 371 [60 8.Ct. “317, 84

L.Ed. 329] (1940); Stoll v. Gottlieb, 305 U.S. 165 [59 S.Ct. 134,

83 L.Ed. 104] (1938)

. , , ’ — . . * 4 * }

T) OF Anres “§ fywvrnr) ane Tre yn | noir that if click NOT. VIO ate 11fo TYP , 44

Insurance ~UTP. OF éiand held tnat it did not vioiate aque process

to subject a foreign corporation to im personam jurisdiction as a sanc

tion tor ftallure to cooperate in discovery Oi iacts reiating tO persona

Gonads eterminations. but those principles include certain exceptions

On the very same dav a unanimous Supreme Court held that “[t]he

} } }: . } } } a . . .

[federal district] court has the authority to pass upon its own Juris-

. . . o~ o . . . . gall . 5 hy >. . .

diction and its decrée sustaining jurisdiction against attack, while

. . . . hae ° "9 ’ ee a

open to same review, is res judicata in collateral action, Chicot

County Drainage Dist., supra, 308. U.S. 371, 377, 60 § $.Ct. 317, 320,

84 L.Ed. 329 ( 1940) (citing Stoll v. Gottheb, supra), that same unan-

imous Court held that, while “[i]t is generally true that a judgment

by a court of competent jurisdiction bears a presumption of

and is not thereafter subject to collateral attack [citing, in

Chicot County Drainage Dist., supra, and Stoll v. Gottlieb, supra},

nonetheless, “Congress, because its power over the subject of bankrupt-

37a

District Court Decision

Moreover, the Public Service Board is not a court of

limited jurisdiction. It is an administrative agency, albeit

one with some quasi-judicial functions.’ As Judge Coffrin

noted in Town of Springfield v. State of Vermont Environ-

mental Board, supra, “finality rules are further relaxed for

agency rulings.” Jd. at 247, citing Grose v. Cohen, 406 F.2d

823, 824 (4th Cir. 1969) (‘Res judicata of administrative

decisions is not encrusted with the rigid finality that charac-

terizes the precept in judicial proceedings.’’). Cf. United

States v. California, 403 F.Supp. 874, 900-01 (E.D.Cal.

1975), aff'd, 558 F.2d 1347 (9th Cir. 1977), rev’d on other

grounds, 438 U.S. 645, 98 S.Ct. 2985, 57 L.Ed.2d 1018

(1978).

Where a state court exercises jurisdiction over a matter

cy is plenary, may by specific bankruptcy legislation create an excep-

tion to that principle and render judicial acts taken with respect to

the person or property of a debtor whom the bankruptcy law protects

nullities and vulnerable collaterally.” Kalb v. Feuerstein, supra, 308

U.S. at 438-39, 60 S.Ct. at 345 (1940) (footnotes omitted). Similar

federal preemption concerns dictate that the administrative ruling

challenged here not be given conclusive res judicata value.

6 See McFeeters v. Parker, 113 Vt. 139, 143, 30 A.2d 300 (1943):

The public service commission is to be classed as an agency of

the Legislature, and is not a court in the strict sense. Trybulski

v. Bellows Falls Hydro-Elec. Co., 112 Vt. 1, 7, 8, 20 A.2d 117, 120.

As there said, omitting citations. ‘The public service commission

is an administrative body, clothed in some respects with quasi

judicial functions, authorized in the exercise of the police power

to make rules and regulations required by the public safety and

convenience and to determine facts upon which existing laws shall

operate, and having in a sense, auxiliary or subordinate legislative

powers which have been delegated to it by the General Assembly.”

See also Vermont Electric Power Co., Inc. v. Anderson, 121 Vt. 72,

84, 147 A.2d 875 (1959).

38a

District Court Decision

entrusted to exclusive federal jurisdiction, its judgment

and any attempt to enforce the judgment may be “‘nullities

subject to collateral attack.”” Kalb v. Feuerstein, supra,

308 U.S. 439, 60 S.Ct. at 346 (footnote omitted) (state

court proceedings involving the estate of a petitioner in

bankruptcy held null and void, whether or not the issue

of jurisdiction was actually litigated in the state court, 7d.

at 444, 60 S.Ct. at 348). When a state administrative agency

takes jurisdiction over a matter committed to exclusive

federal jurisdiction, its rulings are likewise subject to col-

lateral attack. The Public Service Board order here chal-

lenged is not res judicata.

D. The Anti-Injunction Act

The Anti-Injunction Act, 28 U.S.C. §2283, provides:

A court of the United States may not grant an

injunction to stay proceedings in a State court except

as expressly authorized by Act of Congress, or where

necessary in aid of its jurisdiction, or to protect or

effectuate its judgments.

Defendants contend this statute prohibits thé court

from granting declaratory relief voiding the already com-

pleted proceedings of a state administrative agency, the

Public Service Board. While this initially implausible con-

tention has somewhat more substance to it than might

appear on first look, in the last analysis, it must be rejected.

That the statute does not in terms bar declaratory

relief makes no difference. Ordinarily, the practical effect

of injunctive and declaratory relief will be the same.

Samuels v. Mackell, 401 U.S. 66, 73, 91 S.Ct. 764, 768, 27

L.Ed.2d 688 (1971). A court that issues a declaratory judg-

ment has the power to enforce it through “[fl]urther neces-

39a

District Court Decision

'¢ 8)

sary and proper relief,” including an injunction. 28 U.S.C.

§2202.

The defendants argue that the fact that the Public

Service Board is an administrative agency does not make

the Anti-Injunction Act inapplicable. They contend that

the Board, in issuing the declaratory ruling here challenged,

was “sitting as a court.’”’” Memorandum Supporting Defen-

dant’s Application for a Preliminary Determination on the

Issues of Jurisdiction, dated June 18, 1982, at 10. Their

argument proceeds by analogy from two related but distinct

legal doctrines.

The first is the doctrine of administrative exhaustion

announced in Prentis v. Atlantic Coast Line, supra, 211

U.S. 210, 29 S.Ct. 67, 53 L.Ed. 150. This doctrine re-

quires would-be litigants in federal court seeking to chal-

lenge state administrative action to ‘make sure that the

State in its final legislative action would not respect what

they think their rights to be, before resorting to the courts

of the United States.”’ Jd. at 230, 29 S.Ct. at 71. In Prentzs,

the Virginia State Corporation Commission set railroad

rates, subject to review by the Virginia Supreme Court of

Appeals. The Supreme Court, speaking through Justice

Holmes, held that the Virginia Supreme Court of Appeals,

in reviewing rates, was exercising a ‘legislative’ rather than

a judicial function. Jd. at 227, 29 S.Ct. at 69. Prentis, thus,

mandates a functional analysis as a part of the inquiry

into whether further state administrative action is required

before a federal court should take jurisdiction.

The second doctrine on which the defendants rely

is the rule that the Anti-Injunction Act does not bar in-

junctions against the administrative actions of a state

court. This doctrine was also first set forth in Prentis:

40a

District Court Decision

“Proceedings legislative in nature are not proceedings

in a court within the meaning of [the Anti -Injune-

tion Act], no matter what may be the general or. domin-

ant character of the body in which they may take place.”

Id. at 226, 29 S.Ct. at 69. Thus, where a state court

exercises such nonjudicial powers as control over bar ad-

missions, Feldman v. Gardner, 661 F.2d 1295 (D.C.Cir.

1981), petition for cert. filed, 50 U.S.L.W. 3769 (Feb. 23,

1982); Harris v. Louisana State Supreme Court, 334 F.

Supp. 1289, 1299 (E.D.La. 1971): approving an Indian’s

conveyance of land, Armstrong v. Maple Leaf Apartments,

Ltd., 508 F.2d 518 (10th Cir. 1975); or declaring election

returns, Rowdebush v. Hartke, 405 U.S. 15, 21, 92 S.Ct.

804, 808, 31 L.Ed.2d 1 (1972), the Anti-Injunction Act does

not apply.

The defendants urge that when a state administrative

agency acts in a judicial capacity, the Anti-Injunction Act

should preclude federal court interference. As the plaintiffs

correctly point out, this was a question expressly pretermit-

ted in Prentis, supra, 211 U.S. at 224-26, 29 S.Ct. at 68-9.

In Prentis, the Court noted that the Virginia State Corpor-

ation Commission had the “power to enforce compliance

with its order by adjudging and enforcing, by its own appro-

priate process, against the offending company the fines and

penalties established by law.” Jd. at 225, 29 S.Ct. at 69

(emphasis added). The Court went on to “assume, without

deciding, that, if it was proceeding against the appellees to

enforce the order and to punish them for a breach, it then

would be sitting as a court and would be protected from

interference on the part of the courts of the United States.”

Id. at 226, 29 S.Ct. at 69 (emphasis added).

The court finds it unnecessary to address this as-

sumption, expressly left undecided in Prentis and un-

4la

District Court Decision

decided since. Cf. Gibson v. Berryhill, 411 U.S. 564, 573 n.

12, 93 S.Ct. 1689, 1695 n. 12, 36 L.Ed.2d 488 (1973): Dela-

ware Coach Co. v. Public Service Commission, 265 F.Supp.

648, 652 (D.Del. 1967). For the court oncludes that, asum-

ing the bar of the Anti-Injunction Act may prevent federal

court interference against some iad tale proceedings

of state adi neal agencies, unless those proceedings

ency must, at the least,

ee ane A

are in rem the state administrative a

have the power to enforce its own orders for the agency to

be deemed a “court” within the meaning of the Act. “A

judicial inquiry investigates, declares, and enforces liabili-

}

ties as they stand on present or past facts and under laws

supposed already to exist.” Prentis, s upra, 211 U.Sat 226,

29 S.Ct. at 69 (emphasis added).’ “The nature of the final

act determines the nature of the previous injury.” Jd. at

227, 29 S.Ct. at 69

71 P ‘ C , YY -

ry ¥ , , > i? °* a ha we ‘ 7 > — +. r a a} ae

‘ as .< + a wud s 4 s clu eee 4id

‘ } ¢ 1 *

y { we + , , ‘ ; ¢ ae mmeryn3iq stat

st TY} ‘ f > )

AXA itt i Ad ‘ . + « Yi sialic £

Corporation (¢ SStoOT . rt a7 . ntiv. t nti-

s} aiili " 4 a 4 a ‘ 4 y aa’

~* . y \ + ; = + r , < - + lr + ~ + Y ~

Ir pace es dil ‘5 4,00 4 I Sa i 4 a is Ciusion

, } * . (

ho , 1 ¢ ¢ —— ae : - *% = ¢ r “ 3 y

i C ~AUalCicu ‘ J ) Sii%e } => Sa ( orporation (omm iSe201i

> , | ry? . _ syd ey ft 7 - oa * : ~~ * ‘ res s?

It issued, « cuted a7 é é Its OV S anda processes; It

" yet +> 1? + y + , mm? npt -.

CcOUuUIC ISsSU¢ (4 Cc J C ¥ —~ Ws b4d040i Aueiis so 4 A 444) inction it

Tr + + + | a é osm m -

punisned [or Cor mp i7md ics Lqmeé? lecreés and orders

4] ‘ ee eee +} F area rt of record

had the same force a 1s st iny othe t ecc

4} ‘ ’ P

2) ry { + faerp 4 > oy rT rr Efe

? hé SLalé ona e ¢ €éd OY [sa j D De D ESSES Tt

pe i i i

;

re M a ra 4 aie $ 9 - ye tre? - ‘ tram

was yt Su ect i res Oy any < € 5 ¢ iTt, ana irom

4 J

ry ryt - ~ rr ° 4 + + ~~

Wilt i Git G)} ane av to C wu

. . . .

State 1 +» nroing + » Paenricinan

. 4 i< Gaels ing tae Cecislon

| By y vy rn? ryt nor. ode os

Ait, 24008 i J Vy a SUPCTSCUCaS

Prentis, (opinion of Fuller, C ee cone cur-

ring in the

42a

District Court Decision

That the Vermont Public Service Board may have

certain judicial powers, and may observe all the refine-

ments of courtroom procedure, does not alter the fact

that it lacks the power to enforce its own orders. By Ver-

mont law, the Public Service Board must apply to the

Vermont Supreme Court to enforce its orders. 30 V.S.A.

§15. And although “ ‘l[o]rdinarily, when properly applied

for, a mandate to enforce such order would issue almost

as a matter of course.’”’ the Supreme Court will refuse to

enforce the order if it represents an abuse of discretion or

if the Board’s powers were not exercised according to law

or in a manner that injures property rights unjustly. Mc

Feeters v. Parker, 113 Vt. 139, 144, 30 A.2d 300 (1943),

quoting from West Rutland v. Rutland Ry. Light and Power

Co., 98 Vt. 508, 511, 129 A. 303 (1925).*

Defendants submit that the fact that the Public Service

Board must apply to the Vermont Supreme Court for en-

forcement of its orders is irrelevant, since “[a] proceeding

before the Vermont Supreme Court would clearly be a ‘State

court proceeding’ within the purview of the Act.” Defen-

dant’s Reply to Plaintiffs’ Memorandum on the Issues of

Jurisdiction Raised in Defendant’s Application for a Pre-

liminary Determination dated July 23, 1982, at 4. A unani-

mous Supreme Court rejected a similar argument, advanced

in a case decided two years before Prentis and analogous to

the instant case:

It is also objected that an injunction will not lie

from a United States court to stay proceedings in a

state court, because of the provisions of [the Anti-In-

junction Act.]. The [Mississippi Railroad] [C]om-

mission is, however, not a court, and is a mere admin-

8 See footnote 6, supra.

43a

District Court Decision

istrative agency of the State, as held by the Mississippi

court.

It is urged, however, that proceedings in a state

court were commenced by the presentation of the

petition of the citizens of Magnolia to the railroad com-

mission, and because the commission, having made an

order to stop the trains, would have to resort to the

proper state court to aid it in the enforcement of its

order, therefore the whole proceeding must be regarded

as in a state court from the commencement. Whatever

may be the provision of the state statute in regard to

the state court of the order of the railroad commission,

the proceeding while before the commission never

thereby became a proceeding in a state court, and the

jurisdiction of the Federal court to enjoin the com-

mission from the enforcement of its order, because such

order was a violation of the Federal Constitution, was

not in the least affected.

Mississippi Railroad Commission v. Illinois Central Rail-

road Co., supra, 203 U.S. 335, 341, 27 S.Ct. 90, 93, 51 L.Ed.

209 (1906) (citations omitted) (Peckham, J., for a unan-

imous Court). Cf. Hill v. Martin, 296 U.S. 393, 402 and n.

14, 56 S.Ct. 278, 282 and n. 14, 80 L.Ed. 293 (1935).

Policy, as well as precedent, supports this interpretation

of the Anti-Injunction Act. Where a state chooses to confer

a part of its judicial business on an administrative agency

and grants the agency the power to enforce its own orders,

it makes that agency a part of the state’s judicial apparatus.

The same considerations of comity between parallel judicial

systems that underlie the Anti-Injunction Aci’s bar against

federal court interference with state court proceedings mili-

tate against interference with the agency’s proceedings.

443

District Court Decision

Where a state reserves to its courts the power to enforce an

agency’s orders, the state court system retains a certain

power of oversight over the agency. = already mentioned,

in Vermont, the state Supreme Co t will not enforce an

order of the Public Service Boa nd t that it concludes repre-

sents an abuse of discretion. McFeeters v. Parker, supra,

113 Vt. at 144-45, 30 A.2d 300. For the federal courts to

share this power of oversight creates no — intrusio

into a parallel judicial system. This shared responsibility

for oversight is but an incident of the concurrent obligati

of state and federal courts to enforce state and federal

If aggrieved with a final state administrative order

such as that at issue here, a party with a claim of fed-

eral right may pursue state remedies, or may elect to

proceed at once to the courts of the United States to enjoin

the enforcement of the order. Bacon v. Rutland Railroad

Co., 232 U.S. 134, 34 S.Ct. 283, 58 L.Ed. 538 (1914)

(Holmes, J., for a unanimous Court) (held, party aggrieved

by order of the predecessor of the Vermont Public Service

Board could seek equitable relief in the United States Di

trict Court for the District of Vermont in heu of an appeal

to the Vermont Supreme Court). The choice of forum be-

longs to the plaintiff.

At least where the state has drawn a line between

state court and state administrative agency by denying the

latter the power to enforce its own orders, and if the state

administrative agency is not exercising in rem jurisdiction,

the Anti-Injuncton Act does not bar a federal court from

enjoining enforcement of the state agency's order. Whether

and under what circumstances the Anti-Injunction Act does

prevent a federal court from issuing injunctive relief against

a state administrative agency that possesses the power to

enforce its orders is a question that need not be decided here.

45a

District Court Decision

Defendants seek to rely on Prouty v. Citizens Utility

Co., 257 F.2d 692 (2d Cir. 1958), cert. denied, 358 U.S. 867,

79 S.Ct. 98, 3 L.Ed.2d 99 (1958), a case they allege is “‘in all

material respects, identical” to this case. Prouty, however,

“rest[ed] on a principle of narrow compass,” id., 257 F.2d at

694:

Necessary to the harmonious cooperation of federal and

state tribunals is the well recognized rule that the

court first assuming jurisdiction over property may

maintain and exercise its jurisdiction to the exclusion

of the other. The petition for condemnation was a pro-

ceeding in rem, where the state tribunal must control

the property to give effect to its Jurisdiction.

Id. (footnote omitted). Since in this case the Publie Service

Board has not exercised in rem jurisdiction, Prouty 1s in-

apposite to the Anti-Injunction Act issue here.

It is one matter to say that when a state court exercises

administrative functions, the Anti-Injunction Act does not

apply, see Feldman v. Gardner, supra; it is entirely another

matter to conclude that an agency exercising certain quasi-

judicial powers thereby is a “court” protected by that Act.

The Public Service Board lacks the power of enforcement.

It exercises narrow, “special and statutory powers not

according to the common law, as to which nothing will be

presumed in favor of its jurisdiction.” McFeeters v. Parker,

supra, 113 Vt. at 144, 30 A.2d 300. “The courts have power

to prevent an abuse of discretion” by the Board, id., and if

circumstances justify equitable relief, “the court of chancery

will afford a remedy.” /d. at 145, 30 A.2d 300. Because the

Public Service Board is an agency that lacks the power to

enforce its order and was not exercising in rem jurisdiction

in the ruling here collaterally attacked, the Anti-Injunction

Act does not apply, and this court shares with the courts of

46a

District Court Decision

Vermont the power to restrain the Board’s proceedings in

an exclusively federal domain outside its proper jurisdiction.

E. Principles of Equity, Comity, and Federalism

Defendants request that this court abstain from de-

ciding this case for reasons of equity, comity, and fed-

eralism. These principles are generally identified with

Younger v. Harris, supra, and its progeny, but the doctrine

of equitable restraint underlying the Younger decision has

long been applied to both criminal and certain civil pro-

ceedings. Douglas v. City of Jeannette, 319 U.S. 157, 63

S.Ct. 877, 87 L.Ed. 1324 (1943); cf. Huffman v. Pursue,

Ltd., 420 U.S. 592, 603-05, 95 S.Ct. 1200, 1207-09, 43

L.Ed.2d 482 (1975). The Supreme Court has recently

applied the Younger doctrine to preclude federal court inter-

ference with pending state enforcement actions in which

important state interests in the efficient functioning of the

state judicial system or other important state policies are

at stake. Middleser County Ethics Committee v. Garden

State Bar Association, - US. ......, 102 Si. 2616, 3

L.Ed.2d 116 (1982) (disciplinary proceedings against a

lawyer brought by a state agency under the control of the

state supreme court); Moore v. Sims, 442 U.S. 415, 99 S.Ct.

2371, 60 L.Ed.2d 994 (1979) (emergency custody litigation

initiated by the State to protect children from parental

abuse); Trainor v. Hernandez, 431 U.S. 434, 97 S.Ct. 1911,

52 L.Ed.2d 486 (1977) (attachment proceedings to recover

money fraudulently obtained through state welfare pro-

grams); Juidice v. Vail, 430 U.S. 327, 97 S.Ct. 1211, 51

L.Ed.2d 376 (1977) (civil contempt proceedings essential to

effectuate state court judgments) ; Huffman v. Pursue, Ltd.,

supra, 420 U.S. 592, 95 S.Ct. 1200, 43 L.Ed.2d 482 (1975)

(public nuisance proceedings initiated by the State).

47a

District Court Decision

The proceeding before the Public Service Board was

not a state enforcement proceeding, but, rather, was initi-

ated by the Town of Cavendish. Cavendish sought to pro-

tect environmental, aesthetic, historical preservation, and

economic values, and such other values as ‘‘the traditional

attachment to home and hearth in Vermont.” See Petition

of the Town of Cavendish, P.S.B. Docket No. 4444, docu-

ment submitted by Cavendish entitled Scope of Project,

filed April 2, 1980, at 2. While these concerns are all im-

portant to Vermonters, it cannot escape comment that the

Town of Cavendish balanced these values somewhat differ-

ently than did the Town of Springfield. Both appeared be-

fore the Board essentially as private parties. Both sought

to influence the course of the Board’s administrative actions.

In short, because the proceeding before the Board was

begun by a municipality to protect chiefly local interests,

and the Vermont courts were not involved at any stage, the

two principal reasons for Younger v. Harris abstention -

deference to a State’s effort to enforce important state

policies, and respect for the integrity of the state judicial

system, cf. Huffman v. Pursue, Ltd., supra, 420 U.S. at

608-09, 95 S.Ct. at 1210 — are present here in attenuated

form.

To be sure, Cavendish’s application to the Public

Service Board resulted in the Board’s taking jurisdiction

over the Town of Springfield’s hydroelectric project, and

the court is certain that the Board, in exercising that juris-

diction, would desire to enforce policies of importance to

the people of Vermont. But the customary deference to

state enforcement efforts is suspended when, as in the in-

stant case, the plaintiffs’ challenge is that those efforts are

preempted under the Supremacy Clause. As Judge Friendly

has written, “abstention is peculiarly inappropriate when

48a

District Court Decision

the federal claim is that the state has been ousted from

jurisdiction.” Chemical Specialties Manufacturers Associa-

tion, Inc. v. Lowery, 452 F.2d 431, 433 (1971). Although

Judge Friendly was not referring specifically to Younger v.

Harris abstention, his reasoning applies here in full force.

“[Wlhere the only question is whether it is constitional to

fasten the administrative procedure onto the litigant, the

administrative agency may be defied and judicial relief

sought as the only effective way of protecting the asserted

constitutional right.” Public Utilities Commission v. United

States, supra, 355 U.S. at 540, 78 S.Ct. at 451. See also

Public Utilities Commission v. United Fuel Gas Co., 317

U.S. 456, 63 S.Ct. 369, 87 L.Ed. 396 (1943); cf. People v.

King, 463 F.Supp. 749, 751 (D.Nev. 1979) (dictum)

(“Thus, there is no question that King could have

brought an action for declaratory relief against the State

in this Court. And, there is no question that, had he done

so under the Commerce Clause and preemption theories

which he asserts here, this Court would have original juris-

diction over the matter and abstention would be inappro-

priate.’’).

In Bacon v. Rutland Railroad Co., supra, the Supreme

Court unaminously rejected the argument of the Public

Service Board’s predecessor that until the complainant

“had taken the appeal from the order [of the Public Service

Commission] to the Supreme Court of the State that is

provided by [the predecessor statutes to current 30 V.S.A.

$$ 12, 14], it ought not to be heard to complain elsewhere.”

Id., 232 U.S. at 136-37, 34 S.Ct. at 283. Justice Holmes,

writing for the Court, repeated the teaching of Prentis,

supra, that ‘‘at the judicial stage,” the plaintiff “had a right

to resort to the courts of the United States at once.” Bacon,

supra, at 137, 34 S.Ct. at 284. Bacon v. Rutland Railroad

494

District Court Decision

Co. remains good law. See Huffman v. Pursue, Ltd., supra,

420 U.S. at 610 n. 21, 95 S.Ct. at 1211 n. 21. Accordingly,

principles of equity, comity, and federalism do not preclude

this court from proceeding to the merits of the plaintiffs’

ease, especially since plaintiffs’ challenge to the Public Serv-

ice Board’s order is predicated on the Supremacy Clause and

federal preemption.

II. THE MERITS

As the Public Service Board majority recognized in

Petition of the City of Winooski, P.S3.B. Docket No. 4606

(Jan. 14, 1982), a long line of cases has held that federal

jurisdiction over the licensing of hydroelectric projects on

navigable waters of the United States preempts state licens-

ing authority. Jd., slip op. at 2-3, citing, inter alta, First

Iowa Hydro-Electric Cooperative v. Federal Power Com-

mission, 328 U.S. 152, 66 S.Ct. 906, 90 L.Ed. 1143 (1946);

Federal Power Commission v. Oregon, 349 U.S. 435, 75

S.Ct. 832, 99 L.Ed. 1215 (1955); Tacoma v. Taxpayers of

Tacoma, 357 U.S. 320, 78 S.Ct. 1209, 2 L.Ed.2d 1345 (1958) ;

Washington Dept. of Fish and Game v. Federal Power Com-

mission, 207 F.2d 391 (9th Cir. 1953), cert. denied, 347

U.S. 936, 74 S.Ct. 626, 98 L.Ed. 1087 (1954); Town of

Springfield v. State of Vermont Environmental Board,

supra; Citizens Utilities Co. v. Prouty, 122 Vt. 443, 176

A.2d 751 (1961), cert. denied, 369 U.S. 838, 82 S.Ct. 867, 7

L.Ed.2d 842 (1962); In re Bellows Falls Hydro-Electric

Corp., 114 Vt. 443, 47 A.2d 409 (1946). “All of this pre-

cedent notwithstanding,” the majority wrote, “it appears to

us that the United States Supreme Court, which is the

ultimate authority on matters of federal preemption, has,

by a recent decision, signaled its rejection of First Jowa and

all of its progeny.” Petition of Winooski, supra, slip op. at

50a

District Court Decision

3, citing California v. United States, 438 U.S. 645. 98 S.Ct.

2985, 57 L.Ed.2d 1018 (1978). In the declaratory ruling

challenged in this case, Petition of the Town of Cavendish,

supra, the Public Service Board found the issue “identical”

to that in Petition of Winooski, and ‘“‘adhere[d] to the

views expressed in the majority opinion therein.” Petition

of Cavendish, supra, slip op. at 4.

The question for decision is thus whether the Su-

preme Court has in California v. United States, supra,

implicitly overruled First Jowa. The short answer to this

question is that it has not. Six weeks after the Public Serv-

ice Board issued its ruling in Petition of Winooski, supra,

and six weeks before it ruled in Petition of Cavendish,

supra, a unanimous Supreme Court cited First Jowa with

approval for the proposition that “New Hampshire’s pur-

ported ‘ownership’ of the Connecticut River .. . provides no

justification for restricting or conditioning the use of these

federally-licensed [hydroelectric] units.” New England

Power Co. v. New Hampshire, 455 U.S. 331, ...n. 6, 102

S.Ct. 1096, 110 n. 6, 71 L.Ed.2d 188 (1982).

In California v. United States, the Supreme Court dealt

with a statute distinct in both purpose and history from

that at issue in First Jowa. First Iowa had examined federal

preemption of the licensing of hydroelectric projects, and

construed §27 of the Federal Power Act, now codified at

16 U.S.C. §821. California v. United States explored state

and federal authority over federal reclamation projects, and

interpreted §8 of the Reclamation Act of 1902, codified at

43 U.S.C. §§372, 383. Notwithstanding some similarity in

the wording of the statutes, they serve different objectives,

and relate to federal actions fundamentally dissimilar in

nature.

5la

District Court Decision

Section 27 of the Federal Power Act provides:

Nothing contained in this chapter shall be con-

strued as affecting or intending to affect or in any way

to interfere with the laws of the respective States re-

lating to the control, appropriation, use, or distribution

of water used in irrigaton or for muncipal or other uses,

or any vested right acquired therein.

16 U.S.C. §821.

In First Iowa, the Supreme Court construed this statute

as being “limited to laws as to the control, appropriation,

use or distribution of water in irrigation or for municipal or

other uses of the same nature.” Jd., 328 U.S. at 175-76, 66

S.Ct. at 917. The Court rejected an interpretation of §27

that would have preserved concurrent state jurisdiction over

the licensing of hydroelectric plants on navigable waters.

Id. at 178-81, 66 S.Ct. at 918. It stressed that the Federal

Power Act created an “integration” rather than a “duplica-

tion” of federal and state jurisdictions. Jd. at 176, 66 S.Ct.

at 917. Certain matters, such as irrigation, were left to the

States to regulate, provided such regulation was not incon-

sistent with federal law. /d. at 174-75 and n. 19, 66 S.Ct.

at 916 and n. 19. Other matters, such as hydroelectric plant

licensing, were left exclusively to the Federal Government.

Thus, “without setting up a divided authority over any one

subject,” both the States and the Federal Government were

given a voice in the regulatory plan. /d. at 174, 66 S.Ct. at

916 (footnote omitted).

Concurrent jurisdiction over licensing was impermis-

sible, the Court held:

A dual final authority, with a duplicate system of state

permits and federal licenses required for each project,

would be unworkable. “Compliance with the require-

52a

District Court Decision

ments” of such a duplicated system would be impossi-

ble in some cases and probably difficult in most of them.

Id. at 168, 66 S.Ct. at 913 (footnote omitted). Because

“{t]he detailed provisions of the Act providing for the

federal plan of regulation leave no room or need for conflic-

ting state controls,” concurrent state licensing up to the

point of veto was condemned along with the clearly im-

proper ‘veto power over the federal project” that the power

to withhold a state permit implies. Jd. at 181, 66 S.Ct. at

919 (footnote omitted), 164, 66 S.Ct. at 911. In the licens-

ing stage, federal law covers the field.°

9 As Public Service Board member Bloomberg pointed out dissent

in Petition of Winooski:

A federal license is a comprehensive and detailed document. Di-

rectly or by reference to the parties’ exhibits, it specifies the size,

location and design of the dam, penstocks, powerhouse, generators

and other equipment. It further specifies operating conditions,

minimum releases, safety requirements, access routes and rec-

reational facilities; and it mandates provisions for the protection

of fish and other wildlife, historic sites and the natural environ-

ment generally. Moreover, the federal authorities maintain con-

tinuing jurisdiction over the project, and may alter the terms of

the license or may revoke it if the project is not operated according

to its requirements. Because the federal agency is charged with

concern for the financial liability of the project, it must also be

presumed that the various conditions imposed by the license con-

stitute the maximum limits consistent with the project’s economic

health.

There are therefore, virtually no conditions that a local author-

ity could impose that would not be inconsistent with the terms of

the federal license. At best, only the most trivial specifications

could be required, a result which cannot justify the effort, expense

and time required for the Board’s review of major generating

projects. It would be completely pointless for the Board to act

with its powers thus restricted.

Petition of Winooski, supra, dissenting opinion of Samuel 8S. Bloomberg,

slip-op. at 5-6.

53a

District Court Decision

Section 9(b) of the Federal Power Act, 16 USC.

§802(b), requires the applicant for a Federal Energy Regu-

latory Commission (FERC) license to submit “satisfactory

evidence” of compliance with state laws relating to the use

of water for power purposes. But this subsection “does not

itself require compliance with any state laws.” First Towa,

supra, 328 U.S. at 177, 66 S.Ct. at 918. It is merely a ‘‘sug-

gestion to [FERC] of subjects as to which [it] may wish

to have some proof submitted to it of the applicant's

progress.” Jd. at 177-78, 66 S.Ct. at 918. FERC may wish

to see proof of “the sufficiency of the legal title of the

applicant to its riparian rights, or as to the validity of its

local franchises, if any, relating to proposed intrastate

public utility service.” Jd. at 178, 66 S.Ct. at 918. As Judge

Coffrin noted in the Environmental Board case, ‘the import

of [§ 9(b) and regulations implementing it] leaves no doubt

that it is the function of FERC, to the exclusion of the

[Environmental] Board and any other state agencies, to

act on behalf of the people of Vermont, as well as all others,

to ensure that the interests of all concerned are adequately

protected.” Town of Springfield v. State of Vermont En-

vironmental Board, supra, 521 F.Supp. at 250.

In California v. United States, supra, the Supreme

Court held that §8 of the Reclamation Act of 1902, 43

U.S.C. §383, requires the Secretary of Interior to com-

ply with state water law, including any law requiring

the obtaining of a state permit, in carrying out federal re-

clamation projects, unless the state law is clearly inconsis-

tent with a Congressional directive. The statute at issue

in the case provides:

Nothing in sections 372, 373, 381, 383, 391, 392, 411,

416, 419, 421, 432, 434, 439, 461, 491 and 498 of this

title shall be construed as affecting or intended to affect

54a

District Court Decision

or to in any way interfere with the laws of any State

or Territory relating to the control, appropriation, use,

or distribution of water used in irrigation, or any vested

right acquired thereunder, and the Secretary of the In-

terior, in carrying out the provisions of such sections,

shall proceed in conformity with such laws, and nothing

in such sections shall in any way affect any right of any

State or of the Federal Government or of any land-

owner, appropriator, or user of water in, to, or from

any interstate stream or the waters thereof.

43 U.S.C. §383.

Justice Rehnquist’s opinion for the Court begins with

a detailed history of federal and state involvement in the

reclamation of the arid lands of the Western States. The

lessons of history were important to the Court because

the situations invoking the application of [principles of

comity and federalism] have contributed importantly

to their formation. Just as it has been truly said that

the life of the law is not logic but experience, see O.

Holmes, The Common Law 1 (1881), so may it be said

that the life of the law is not political philosophy but

experience.

California v. United States, supra, 438 U.S. at 648, 98 S.Ct.

at 2987. The federal experience in reclaiming the arid lands

of the West has been that here is a need for uniformity in

the regulation of water rights. Rather than create a uniform

federal water law from scratch, or create a system of dual

rights that would inevitably result in “legal confusion .

if federal water law and state water law reigned side by side

in the same locality,” id. at 669, 98 S.Ct. at 2998. Congress

elected to pursue uniformity by deferring to state regula-

tion. See id. at 665-70, 98 S.Ct. at 2996-98. The Supreme

55a

District Court Decision

Court concluded from amply chronicled legislative history

that, in impounding water tg, we ited in a federal reclama-

tion project, the Secretary of the Interior must comply

with state water law, including the requirement of obtain-

ing a state permit for appropriation of water, if needed, and

satisfying any conditions attached to the permit which are

not inconsistent with federal law. Jd. at 647, 98 S.Ct. at

2987.

If there is one theme that runs through both First Iowa

and California v. United States, it is that duplicative regu-

lation is to be avoided. Both the States and the Federal

Government have roles to play in regulating the use of our

Nation’s waters, but their roles are different. The States

have been given primary jurisdiction over proprietary rights

in water. Local regulation is appropriate because of the

legal and geographical differences between the arid Western

States, where the doctrine of prior appropriation generally

prevails and water rights are subject to strict state regula-

tion, and the Eastern States, where water rights are govern-

ed by the doctrine of riparian rights and an abundance of

water obviates the need for complex state water distribu-

tion plans. On the other hand, the Federal Government has

taken exclusive jurisdiction over the licensing of hydro-

electric projects on navigable waters. It has established a

specialized federal agency, the Federal Energy Regulatory

Commission, which has the expertise to evaluate such

projects in light of “comprehensive”’ criteria. Cf. 16 U.S.C.

§803(a); Town of Springfield v. State of Vermont Environ-

mental Board, supra, 521 F.Supp. at 249-50. That agency’s

control over the licensing of hydroelectric projects on navig-

able waters of the United States is plenary. The proper

means by which the Public Service Board and the Town of

Cavendish may make sure that their concerns are taken

56a

District Court Decision

into account in the construction of the hydroelectric plant

the plaintiffs propose to build is to appear before the

FERC as parties, as they have a right to do, see 18 CLF.R.

$1.8 rather than to subject the plaintiffs to duplicative,

and possibly conflicting, regulation.

In sum, California v. United States does not implicitly

overrule First Iowa. The two cases are consistent. Both

recognize the need for a uniform system of regulation in

whieh the States perform certain functions and the Federal

Government performs other functions. While the Vermont

Public Service Board may eventually have jurisdiction over

certain aspects of the Black River hydroelectric project,

such as rate-setting, it is without jurisdiction over the

licensing and approval of the project.

It is DECLARED and ADJUDGED that, under the

Federal Power Act and the Supremacy Clause, the juris-

diction of the Federal Energy Regulatory Commission to

act on the plaintiffs’ application for a license to develop

the proposed Black River hydroelectric project is exclusive

of the jurisdiction assumed by the majority of the members

of the Vermont Public Service Board over the improve-

ments. works, facilities, features, and elements of the Black

River project within the plaintiffs’ application to FERC

for a license for the project. Accordingly, the order entered

by the Public Service Board on April 7, 1982, and filed on

April 8, 1982, in Petition of the Town of Cavendish, P.S.B.

Docket No. 4444, exceeds its jurisdiction, and is without

legal force and effect. Since no disputed issue of fact is

presented, the plaintiffs’ motion for summary judgment is

GRANTED.

It isso ORDERED.

574

STATE OF VERMONT

PUBLIC SERVICE BOARD

Docket No. 4444

Petition of the Town of Cavendish

for a Declaratory Ruling

Order Entered 4-8-82

INTRODUCTION

This is a declaratory ruling proceeding commenced on

January 25, 1980 by the petitioner, the Town of Cavendish.

Two other parties have appeared, the respondent, the Town

of Springfield, and an intervenor, the Concerned Citizens

of the Black River Valley.

The petition asks the Board to declare that a certain

“hydro-electric project of the Town of Springfield, Vermont

is subject to Section 248 of Title 30 V.S.A. and that the

Town must obtain a Certificate of Public Good from the

Public Service Board pursuant to said section of the law.”

The petition does not specifically identify the project, but

in response to the petitioner’s request, the respondent sub-

mitted on March 31, 1980 an exhibit giving a detailed

description. At the hearing held on January 21, 1982, the

Town’s application to the Federal Energy Regulatory Com-

mission for a license for the project was admitted as the

Board’s Exhibit No. 1 for the purpose of showing the loca-

tion and scope of the project as well as to show the

pendency of the action before F.E.R.C.

There are no disputed issues of fact in this case. The

sole question for decision is whether the Board has juris-

diction under 30 V.S.A. §248 with respect to hydro-electric

generating facilities which are proposed to be constructed

58a

Board’s Ruling, Docket No. 4444

by the respondent on the Black River within the Towns of

Cavendish, Springfield and Weathersfield and which are

subject to the licensing authority of F.E.R.C. under the

Federal Power Act, 16 U.S.C. §791a et seq.

DISCUSSION

We turn first to three ancillary issues raised by Spring-

field’s Motion to Dismiss filed on January 20, 1982. The

first of these is a claim that this action is premature because

Springfield, not having yet received a federal license, is not

able to commence site preparation or construction. That

work on the project is not imminent does not seem to us to

be material. One of the important reasons why declaratory

ruling procedures have been established in this state and

elsewhere is so that parties can ascertain their rights and

responsibilities in advance of the time when they must

undertake a course of action. See 12 V.S.A. §4722: Robtoy

v. City of St. Albans, 132 Vt. 503, 321 A.2d 451 (1974). By

making an application to the Federal Energy Regulatory

Commission for a federal license, Springfield has set in

motion a course of events which likely will lead (if the

license is granted) to construction within the reasonably

forseeable future. The controversy, therefore, is neither

abstract nor hypothetical: and we think it is appropriate

for a decision to be rendered now.

What has been said immediately above should be

sufficient to answer Springfield’s second contention, that is,

that there is no present controversy for which declaratory

relief is appropriate.

Finally, Springfield raises a question as to whether it

is a company within the meaning of 30 V.S.A. §201, assert-

ing that if it is not, it need not obtain a certificate of public

good under Section 248, which provides that “No company

59a

Board’s Ruling, Docket No. 4444

as defined in Section 201 .. . may begin site preparation

for or construction of an electric generating facility within

the state... unless the... board... [issues a certificate

of public good].” (Emphasis added.) Section 201, in turn,

defines companies to include municipalities “owning or

conducting any public service business or property use in

connection therewith. ..."’ While Section 248 may have

been somewhat inartfully drafted in respect to this question,

we think there is no doubt that it applies here. If Spring-

field’s argument is correct, then even an existing and oper-

ating utility could avoid compliance with Section 248 simply

“by establishing a subsidiary company to construct its

generating and transmission facilities. Since the purpose of

the statute is both to assure that such facilities are not need-

lessly constructed and to assure that environmental goals are

not violated, this interpretation would render the statute

a total nullity. It is obviously contrary to the intent of the

statute.

Moreover, at the very instant that site preparation

commences, the entity responsible for the same begins oper-

ation of “public utility business” and/or comes into owner-

ship of “property used in connection therewith.” The

statute thus comes into effect at that moment at the

latest, and without a certificate of public good in hand, the

company would be in violation.

As to the merits of this case, we are presented with the

identical issue decided in Docket No. 4606, Petition of the

City of Winooski. We adhere to the views expressed in the

majority opinion therein and therefore answer this petition

in the affirmative.

60a

Board’s Ruling, Docket No. 4444

ORDER

IT IS HEREBY ORDERED, ADJUDGED AND

DECREED by the Public Service Board of the State of

Vermont that:

1. The hydro-electric project proposed to be built by

the respondent, Town of Springfield, and describ

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.