# Petition — V. Louise McCarren v. Town of Springfield, Vermont and Vermont Public Power Supply Authority > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385010_0960%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1983 - **Citation:** 464 U.S. 942 ## 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, v. 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) a i 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. —— oO f 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 4 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 on lv 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 vi 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 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, v. 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. 2 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 3 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. 4 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. 5 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.” 6 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, a ‘ 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 8 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- 9 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- 10 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 1] 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, 12 681 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.) 13 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 14 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 15 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 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 e 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 17 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- 18 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 m + a8) | a D 2. + 2 3 ae | @m © 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 20 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 21 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. 22 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. nN 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- 23 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.). 24 (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 25 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 2a 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. (c) Such additional information as the commission 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- 3a 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- 4a 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 f9 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 5a 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. 6a 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¢ ’ * 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 a 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 8a 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. 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 sn , Vermont pS 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 9a 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 —, 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 + 44 7 ry = 4 a ~ ff, oO o- —) 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 = . | ¢ 2) 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: Or Oy © | phe os QO cy cs iy i! Ls) bo | ap o Tf) rs ca) © oe | 2. boty ct > my 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 oe 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 ny u = e, oo re) po: LY ~ / 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 c . 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 . . i 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). + m Q CL ry ey) Al | S oO 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 . \ ‘ 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 + “~ } PCRULALIVUUS), wtace s¥€ £GTH U. & a6 ae a 4 41¢ , 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 > 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- 0 is contention, 2 stinguishing ~ Sg ) 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 og '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 fo bet « He 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. . — 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 I © ie) + +a } , I } + 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 —_— - as aririert . PRI I: ; rT /177 27 ‘) 7 yr4Ot “wT SUCCG i. i d q / ‘ # VU TitestOrm, Lt HUDD. gf, > » 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 4 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 L 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 4 2} } ? ? ron ArTIMPraAatInn ¢ .% et ok a a i, ae i on) 437AFtIDH © c STP. to subject a foreign corporation to im personam jurisdiction as a sanc st oe ine tee twits te goon nf taste volatine © rsonal 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 gq 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 . ) AXA itt i Ad ‘ . + « Yi sialic £ Corporation (¢ SStoOT . rt a7 . ntiv. t nti- s} aiili " 4 a 4 a ‘ 4 y aa’ ~* . y \ + ; = + r , 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 é 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. a 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. 132 [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385010_0960%3A1. Public record. Not legal advice.