Petition for Writ of Certiorari — Potomac Electric Power Co. v. Curran
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Re -8 71 —
i | DFC 1 1986
' CLERK
7) _ Supreme Court, U.S,
FILED
JR.
IN THE
Siuwreme Court of the United States
OCTOBER TERM, 1986
THE PoTOMAC ELECTRIC POWER COMPANY,
- Petitioner,
STEPHEN H. SACHS, ATTORNEY GENERAL OF MARYLAND,
AND ADELE WILZACK, SECRETARY OF THE MARYLAND
DEPARTMENT OF HEALTH AND MENTAL HYGIENE,
Respondents.
PETITION FOR WRIT OF CERTIORARI TO THE
UNITED STATES COURT, OF APPEALS
FOR THE FOURTH CIRCUIT
E. BARRETT PRETTYMAN, JR.*
SHERWIN J. MARKMAN
JOHN C. KEENEY, JR.
DAVID J. HAYES
JOHN G. ROBERTS, JR.
HOGAN & HARTSON
(a partnership including
professional corporations)
815 Connecticut Ave., N.W.
Washington, D.C. 20006
(202) 331-4685
ARNOLD W. WEINER
Of Counsel: MICHAEL SCHATZOW
KATHLEEN B. DEWEESE ETHAN L. BAUMAN
Associate General Counsel MELNICOVE, KAUFMAN, WEINER,
POTOMAC ELECTRIC SMOUSE & GARBIS, P.A.
PowER COMPANY 36 South Charles St.
1900 Pennsylvania Ave., N.W. Baltimore, MD 21201
Washington, D.C. 20068 (301) 332-8525
(202) 872-2520 Counsel for Petitioner
* Counsel of Record
ET
WILSON - EPes PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001
QUESTIONS PRESENTED
1. Did the court below err in holding that federal
courts must abstain in favor of state grand jury investi-
gations, contrary to the recent holding of the Third Cir-
cuit in Monaghan v. Deakins, 798 F.2d 632 (1986)?
2. Did the court below err in holding that abstention
was appropriate in a case seeking relief under a preemp-
tive federal statute, contrary to the holdings of the Sec-
ond, Third, Fifth, Eighth, Ninth, and Eleventh Circuits?
(i)
ii
PARTIES TO THE PROCEEDINGS
Petitioner The Potomac Electric Power Company
(“PEPCO”) is the electrical utility corporation that
services the District of Columbia and parts of Maryland
and Virginia.* Respondents are Stephen H. Sachs, in his
official capacity as Attorney General of Maryland, and
Adele Wilzack, in her official capacity as Secretary of the
Maryland Department of Health and Mental Hygiene.
* Pursuant to Rule 28.1, petitioner notes that it has no affiliates
and no subsidiaries that are not wholly owned.
TABLE OF CONTENTS
QUESTIONS PRESENTED .................... scalinteaianieiamnliohn
PARTIES TO THE PROCEEDINGS ........-.2ow....
SM SP RIE II sc ccccsssescecassuasacnensnecesnesses
i
aha cetiaesneeemenessinninecnsenininasat
PERTINENT CONSTITUTIONAL AND STATU-
a
I. The Decision Below Is In Direct And Irrecon-
cilable Conflict With The Decision Of The Third
Circuit in Monaghan v. Deakins ....................-.....
II. The Court Below Misinterpreted This Court’s
Abstention Decisions In Extending Younger To
Grand Jury Investigations .....00000000000.00-
III. The Court Below Erred In Requiring Absten-
tion In A Case Involving A Preemptive Federal
SE CS ce
IV. The Uniform Resolution Of The Questions Pre-
sented Is Of Overriding Importance To The
Smooth Functioning Of The Federal System .......
IES a
APPENDICES
Appendix A: Opinion of Court of Appeals...
Appendix B: Opinion of District Court on Ab-
EEG Sa
Appendix C: Opinion of District Court on Pre-
RR
Appendix D: Judgment of Court of Appeals .......
Appendix E: Order of District Court on Motion
EE a
Appendix F: Declaratory Judgment Order of
tant
(iii)
10
20
iv
TABLE OF AUTHORITIES
Cases Page
Aluminum Company of America v. Utilities Com-
mission of North Carolina, 713 F.2d 1024 (4th
Cir. 1983), cert. denied, 465 U.S. 1052 (1984)... 23
Baggett v. Department of Professional Regulation,
poh? § Bo: Cs | ee 24-25
Bartram vy. State, 280 Md. 616, 374 A.2d 1144
SUITE .niiecssadpilnicscheielasangtedatiedlsibinsssadiadsaniiglisaunjiéecienes 14
Blair v. United States, 250 U.S. 273 (1919)...:........ 14
Brennick V. Hynes, 471 F. Supp. 863 (N.D.N.Y.
TT Sete a Oi Gre AEN Mee ee 9
Burford v. Sun Oil Co., 319 U.S. 315 (1943) -...... 23
Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691
II acct seccecat cedistndapeneiiciadanichicesiinlaisdeihlnianilicaibeess 21
Champion International Corp. v. Brown, 731 F.2d
I Be a ccinciinicenientlnciideiaptiietssccnesinks 24
Coblentz v. State, 164 Md. 558, 166 A. 45 (1933)... 13
Ellis v. Dyson, 421 U.S. 426 (1975) ......................---- 10
Four Unnamed Plaintiffs v. Hall, 424 F. Supp. 357
(D. Mass. 1976), rev’d on other grounds, 550
7 @ B 3: oe , , St okien one 10
Gibson Vv. Berryhill, 411 U.S. 564 (1973) —.............. 12,17
Grandco Corp. Vv. Rochford, 536 F.2d 197 (7th Cir.
AERC MM ed ab Ness A ANN enc er ee 13
Hawaii Housing Authority v. Midkiff, 467 U.S. 229
| TEETER AORN Er reer a treet 12-13, 15, 17
Hicks v. Miranda, 422 U.S. 332 (1975) ............... a 19
Hotel & Restaurant Employees International Union
v. Danziger, 709 F.2d 815 (3d Cir. 1983), va-
cated on other grounds, 468 U.S. 491 (1984)... 22
Hurtado vy. California, 110 U.S. 516 (1884) ......... 20
In re Neff, 206 F.2d 149 (3d Cir. 1953).................. 16
In re Special Investigation No. 224, 54 Md. App.
137, 458 A.2d 454, cert. denied, 296 Md. 414
CI iicichesseiccissataialahiccccindchiagteaeimelaniaciceahtinaiatestiiess 8,14
In re Special Investigation No. 287, 54 Md. App.
201, 458 A.2d 450, cert. denied, 296 Md. 414
a, 8,14
Johnson v. State, 199 Ark. 196, 183 S.W.2d 15
«RESTORE SUR oe einai Ea EA ER ote ne een 20
v
TABLE OF AUTHORITIES—Continued
Page
Jones V. Rath Packing Co., 430 U.S. 519 (1977)... 21
Kaylor v. Fields, 661 F.2d 1177 (8th Cir. 1981)... 20
Kentucky West Virginia Gas Co. v. Pennsylvania
Public Utility Comm’n, 791 F.2d 1111 (3d Cir.
A aI IE ine li IIR A Sk Sin Nh 22, 24
Langley v. Ryder, 602 F. Supp. 335 (W.D. La.),
aff'd on other grounds, 778 F.2d 1092 (5th Cir.
DS deceit PI Te CRON SI RNP ER OP Ra. ore Ie NAN 10
Marcal Paper Mills, Inc. v. Ewing, 790 F.2d 195
fe PILE SNA DOr a An a See N 22
Marshall v. Chase Manhattan Bank, 558 F.2d 680
OR MR I sccicnkien ihe a 21-22
McCune V. Frank, 521 F.2d 1152 (2d Cir. 1975)... 13
McDonald v. Metro-North Commuter Railroad Di-
vision of Metropolitan Transportation Authority,
565 F. Supp. 87 (S.D.N.Y. 19838) .......................... 13
Middle South Energy, Inc. v. Arkansas Public
Service Comm’n, 772 F.2d 404 (8th Cir. 1985),
cert. denied, 106 S. Ct. 884 (1986) _...0.0022 23-24
Middlesex County Ethics Comm. v. Garden State
Bar Ass’n, 457 U.S. 423 (1982) .......0.0000000.0....... 11-13, 15
Monaghan v. Deakins, 798 F.2d 632 (3d Cir.
SUED ccchsccuninsstiactuhiasteneaiiiae Sosinidiehiadiaeheenieal 6-9, 13, 14, 19-20
New Orleans Public Service, Inc. v. City of New
Orleans, 798 F.2d 858 (5th Cir. 1986) ........0........ 23
Notey v. Hynes, 418 F. Supp. 1320 (E.D.N.Y.
PO eceeaseepiiisioisitertans tains Minatitlan dataacaceahactei li alia 10
Ohio Civil Rights Comm’n v. Dayton Christian
Schools, Inc., 106 S. Ct. 2718 (1986) ........... 11-13, 15-17,
18, 25
Rose V. Mitchell, 443 U.S. 545 (1979) ..02000002 2. 20
South Central Bell Telephone Co. v. Louisiana
Public Service Comm’n, 744 F.2d 1107 (5th Cir.
1984), vacated and remanded on other grounds,
o£ Se Se 8 eee 23
Sovereign News Co. v. Falke, 448 F. Supp. 306
(N.D. Ohio 1977), remanded on other grounds,
610 F236 438 (6th Cie. 1979) ..................-............ 10
Steffel v. Thompson, 415 U.S. 452 (1974) 0.00000... 17
vi
TABLE OF AUTHORITIES—Continued
Page
Stone & Webster Engineering Corp. v. Ilsley, 690
F.2d 323 (2d Cir. 1982), aff'd mem. sub nom.
Arcudi v. Stone & Webster Engineering Corp.,
GS Cl Be Ce eit 21
Town of Springfield, Vermont v. McCarren, 549
F. Supp. 1134 (D. Vt. 1982), aff'd mem., 722
F.2d 728 (2d Cir.), cert. denied, 464 U.S. 942
SRE ae se Se nee 22
United Services Automobile Ass’n Vv. Muir, 792
re Ge Ge Fe certtercescentetitteeenicciecctieteeenes 22
United States v. Calandra, 414 U.S. 338 (1974) ... 9,14
United States v. Cleary, 265 F.2d 459 (2d Cir.),
cert. denied, 360 U.S. 936 (1959) 0 14
United States vy. Coachman, 752 F.2d 685 (D.C.
SR eS 16
United States v. Housand, 550 F.2d 818 (2d Cir.),
cert. denied, 431 U.S. 970 (1977) —.00 16
United States v. Johnson, 319 U.S. 508 (1943)....... 19
United States v. Malone, 111°F. Supp. 37 (N.D.
GUID SUIT sesnsscecscsnncnnntinatieniiaiiiiebniiiealigiaianiinseManiseitiiien 16
United States v. Sells Engineering, Inc., 463 U.S.
| EC i EL ee Se 19
Williams v. Red Bank Board of Education, 662
F.2d 1008 (3d Cir. 1981) 2.0... ee Seen 13
Younger v. Harris, 401 U.S. 837 (1971) 0.0. passim
Constitutional and Statutory Provisions
nn 2
ht Tok | See i ae 4
BD Se ae CS CUED CD CD ceereeeennccenasesestennenosoncnnencceee 2-3, 4
Ohio Rev. Code Ann. § 4112.05 (Supp. 1985)... 12
Ohio Rev. Code Ann. § 4112.06 (I) (1980) 0... 16
Regulations
40 C.F.R. § 761 (1986) —.......W.- PORES Deane ct seta SOON 4
Md. Admin. Code tit. 10, § 51 000 4
Miscellaneous
1A Moore’s Federal Practice 21
National Institute of Justice, Grand Jury Reform:
A Review of Key Issues (1983) 27
IN THE
Supreme Court of the United States
OCTOBER TERM, 1986
No.
THE PoTOMAC ELECTRIC POWER COMPANY,
Petitioner,
Vv.
STEPHEN H. SACHS, ATTORNEY GENERAL OF MARYLAND,
AND ADELE WILZACK, SECRETARY OF THE MARYLAND
DEPARTMENT OF HEALTH AND MENTAL HYGIENE,
Respondents.
PETITION FOR WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
Petitioner, The Potomac Electric Power Company, re-
spectfully prays that a writ of certiorari issue to review
the judgment and opinion of the United States Court of
Appeals for the Fourth Circuit entered in the above-
entitled proceeding on October 17, 1986.
OPINIONS BELOW
The opinion of the Court of Appeals for the Fourth
Circuit is reported at 802 F.2d 1527 and is reprinted in
the appendix hereto (“App.”’) at la.
The opinion of the District Court for the District of
Maryland (Black, J.) on the abstention issue was de-
2
livered orally and is unreported. It is reprinted at App.
20a. The opinion of the District Court on the merits
of the preemption issue is reported at 639 F. Supp. 856
and is reprinted at App. 31a.
JURISDICTION
Petitioner brought suit in the District Court for the
District of Maryland seeking a declaratory judgment that
the Toxic Substances Control Act, 15 U.S.C. §§ 2601 et
seq., preempts the State of Maryland from extending its
general hazardous waste regulations to the use and dis-
posal of polychlorinated biphenyls. Petitioner moved for
summary judgment. Respondents moved to dismiss, con-
tending, inter alia, that the District Court should abstain.
The District Court denied respondents’ motion on March
25, 1986, and subsequently, on April 16, 1986, denied pe-
titioner’s motion for summary judgment and entered
judgment on the merits for respondents. App. 55a-58a.
Petitioner appealed and respondents cross-appealed.
The Court of Appeals for the Fourth Circuit issued an
opinion on October 17, 1986, holding that the District
Court should have abstained. App. la.
The jurisdiction of this Court to review the judgment
of the Fourth Circuit is invoked under 28 U.S.C. § 1254
(1).
PERTINENT CONSTITUTIONAL AND
STATUTORY PROVISIONS
Article VI of the United States Constitution provides,
in pertinent part, that “this Constitution, and the Laws
of the United States which shall be made in Pursuance
thereof * * * shall be the supreme Law of the Land.”
Section 18(a) (2) (B) of the Toxic Substances Control
Act, 15 U.S.C. § 2617(a) (2) (B), provides:
if the Administrator prescribes a rule or order under
section 2604 or 2605 of this title (other than a rule
imposing a requirement described in subsection (a)
(6) of section 2605 of this title) which is applicable
to a chemical substance or mixture, and which is de-
signed to protect against a risk of injury to health
or the environment associated with such substance or
mixture, no State or political subdivision of a State
may, after the effective date of such requirement,
establish or continue in effect, any requirement which
is applicable to such substance or mixture, or an arti-
cle containing such substance or mixture, and which
is designed to protect against such risk unless such
requirement (i) is identical to the requirement pre-
scribed by the Administrator, (ii) is adopted under
the authority of the Clean Air Act or any other
Federal law, or (iii) prohibits the use of such sub-
stance or mixture in such State or political subdivi-
sion (other than its use in the manufacture or proc-
essing of other substances or mixtures).
STATEMENT OF THE CASE
The Potomac Electric Power Company (“PEPCO”) is
the electrical utility corporation that provides service in
the District of Columbia and some surrounding suburbs
in Maryland and Virginia. In providing service, PEPCO
uses electrical transformers that it purchases from man-
ufacturers. Until recently, the mineral oil used in many
transformers was contaminated with polychlorinated bi-
phenyls (“PCBs”) during the manufacturing process.
Transformers become obsolete or unusable after a num-
ber of years, and must be scrapped. For several years
United Rigging and Hauling, Inc. (“United”) purchased
PEPCO’s scrap transformers in the District of Columbia
and transported them to a United salvage yard in Belis-
ville, Maryland, where they were stored with transform-
ers and scrap from other sources. In the spring of 1985,
Maryland authorities discovered that the United site was
contaminated with PCBs.
The use and disposal of PCBs is governed by a com-
prehensive federal regulatory scheme. Under Section
4
6(e) of the Toxic Substances Control Act, 15 U.S.C.
§ 2605(e), Congress directed the Administrator of the
Environmental Protection Agency to promulgate rules
regulating PCBs, and the Administrator has done so.’
Congress also specified that once “the Administrator pre-
scribes a rule or order under section 2604 or 2605 * * *,
no State or political subdivision of a State may * * *
establish or continue in effect, any requirement which
is applicable to such substance or mixture * * *.” 15
U.S.C. § 2617(a) (2) (B). Despite this preemption pro-
vision, the State of Maryland has also undertaken to
regulate PCBs as a hazardous waste under its waste
management program. See Md. Admin. Code tit. 10,
§ 51.
Since May 1985, the Maryland Attorney General has
been investigating PEPCO’s sale and delivery of scrap
transformers to United, as well as the scrapping activ-
ities of United, for alleged violation of Maryland law
and regulations governing PCBs. The Attorney General
convened a grand jury to assist in his criminal investi-
gation. App. 13a.
Quite apart from this pending investigation, the State’s
effort to regulate PCBs has had a direct and immediate
effect on PEPCO’s ongoing operations. The Maryland
regulations have created a climate of uncertainty con-
cerning operations at a PEPCO generating station in
Maryland, since the State has yet to issue the permit
for that station that it required PEPCO to apply for
over two years ago. The Maryland regulations also com-
pelled PEPCO to adopt inefficient trucking and burning
practices for oil shipped to the station, since there is no
storage facility at that site that complies with state as
opposed to federal law. The challenged state regulations
also restrict PEPCO’s use of its facilities in Maryland
1 See 40 C.F.R. § 761 (1986).
5
for storage of electrical equipment, and have compelled
PEPCO to alter its solicitation of bids for scrap trans-
formers so as to exclude bidders who might take the
transformers into Maryland. See Ct. App. JA at 66-69,
127-129.
In response to the foregoing, PEPCO filed a complaint
in the United States District Court for the District of
Maryland, seeking a declaratory judgment that the Toxic
Substances Control Act preempted Maryland from ex-
tending its hazardous waste regulations to cover PCBs.
Respondents moved to dismiss, arguing inter alia that the
state grand jury investigation was a pending state judi-
cial proceeding to which the District Court must defer
under Younger Vv. Harris, 401 U.S. 87 (1971).
The District Court declined to abstain, noting that
“li]t is clear that PEPCO has no present opportunity
to raise its Federal concerns in the Grand Jury proceed-
ings. * * * [I]f there is no opportunity to raise the
Federal issue in the State proceedings, then * * * Younger
abstention is inappropriate.” App. 28a. The court con-
cluded that:
There is no certainty that the Grand Jury will actu-
ally return an indictment, nor is there any indica-
tion of how long PEPCO would have to wait before
it had its forum to raise the Federal defense. Under
such circumstances, it would be harsh, indeed, to
foreclose the opportunity to bring the preemption
challenge to Federal Court prior to indictment. PEP-
CO has no opportunity at all to raise its Federal
claim in the State Grand Jury proceedings[;] princi-
ples of abstention under Younger, therefore, do not
apply. [Jd. at 29a.]
The District Court subsequently ruled on the merits in
favor of respondents, and PEPCO appealed. The State
cross-appealed, reasserting its abstention argument.
6
The Court of Appeals reversed, holding that the Dis-
trict Court should have abstained.2 The Court of Ap-
peals began by noting that the “Supreme Court has never
addressed the issue of whether Younger applies to state
grand jury proceedings,” and also noted that “the Su-
preme Court has never analyzed the treatment of a pre-
emption claim in applying the Younger doctrine.” App.
15a, 16a n.7. The court recognized “the requirement
that the federal plaintiff have an opportunity to present
the federal claim in the state proceedings.” Jd. at 17a.
It held that the requirement was satisfied in this case
not because of any opportunity PEPCO had before the
grand jury, but because of a possible opportunity PEPCO
might have after the grand jury concludes its work: “If
indicted, PEPCO can present its claim of federal pre-
emption by TSCA as a defense to the criminal prosecu-
tion, and therefore has an adequate opportunity to pre-
sent the claim in the_ongoing proceedings.” Id. at 18a.
The court also concluded that Younger should be applied
in a preemption case, stating that “the same logic requir-
ing abstention when there is a constitutional challenge
to a state criminal statute applies to litigation where
there is a claim of federal preemption due to a congres-
sional enactment.” App. 16a n.7.
REASONS FOR GRANTING THE WRIT
I. The Decision Below Is In Direct And Irreconcilable
Conflict With The Recent Decision Of The Third Cir-
cuit In Monaghan vy. Deakins
The court below held that federal courts must abstain .
in favor of a pending state grand jury investigation.
Less than three months earlier, the Court of Appeals for
the Third Circuit reached the exact opposite conclusion
in an indistinguishable case, Monaghan v. Deakins, 798
F.2d 632 (1986). This Court should grant the writ to
2In light of its holding, the court did not consider PEPCO’s
appeal on the merits. See App. 14a.
7
resolve this direct and irreconcilable conflict between the
Circuits on a question of overriding importance to rela-
tions between the state and federal courts and the proper
functioning of our federal system.*
The pertinent facts in Monaghan are indistinguishable
from those of the present case. The federal plaintiffs in
Monaghan were the targets of an ongoing state grand
jury investigation, as PEPCO is in this case. Both in
Monaghan and in this case the state investigation in-
volved issuance of subpoenas, search and seizure of cor-
porate documents, and the physical search of premises.
In both cases, however, the grand jury had not issued
any indictments, and the State accordingly had not com-
menced any prosecution at the time the targets of the
investigation filed suit in federal District Court.
The plaintiffs in Monaghan alleged in their complaint
that the search of their premises was unconstitutional
and sought return of the documents seized by the State.
PEPCO’s complaint, as noted, alleged that the Maryland
law and regulations that formed the basis of the investi-
gation were expressly preempted by federal law. In both
cases the State moved for dismissal, contending that the
federal court should abstain because of the pending state
grand jury investigation.
The District Court in Monaghan agreed with the State
and abstained; the District Court in this case did not.
On appeal, the Third Circuit and the Fourth Circuit
below framed an identical issue for decision. Compare
798 F.2d at 636 (“whether the existence of the state
grand jury proceeding required the district court to ab-
stain under Younger’) with App. 15a (“whether
Younger applies to state grand iury proceedings”). The
3 Counsel for the state authorities in Monaghan have advised that
they will file a petition for certiorari with this Court. The petition
in this case should be considered in conjunction with the petition in
Monaghan.
8
two courts reached diametrically opposed conclusions. As
the Third Circuit stated:
No indictment had been returned against the plain-
tiffs at the time they filed their complaint in the
district court. Thus there was not, for Younger pur-
poses, any ongoing state proceeding warranting ab-
stention by the district court. [798 F.2d at 637.]
The court below, however, held that no indictment was
required for Younger abstention to apply, since PEPCO
eculd raise its federal claim “[i]f indicted.” App. 18a.
The Third Circuit in Monaghan recognized that
“Younger abstention is appropriate only when there is
pending a proceeding in which a state court will have the
authority to adjudicate the merits of a federal plaintiff’s
federal claims.” 798 F.2d at 637 (emphasis in original).
The court noted that a New Jersey grand jury cannot
adjudicate anything, but can only “issue an indictment,
which is no more than a charge that the defendant has
violated the criminal law.” Jd. Only when an indictment
is returned does a state judicial proceeding commence,
thereafter affording an opportunity to have the federal
claims adjudicated. /d.* |
Maryland grand juries are no different from their
counterparts in New Jersey, and they too cannot adjudi-
cate the claims of targets or witnesses.’ The court below
4 Judge Adams dissented from the panel opinion in Monaghan
and from the subsequent denial of petition for rehearing en banc.
798 F.2d at 639-645.
5 See In re Special Investigation No. 237, 54 Md. App. 201, 203,
458 A.2d 450, 452 (“a mere witness, even if the witness might pos-
Sibly at some future time become a- defendant, is utterly incom-
petent to challenge the authority of the grand jury to act’’), cert.
denied, 296 Md. 414 (1983) ; In re Special Investigation No. 224,
54 Md. App. 187, 458 A.2d 454, cert. denied, 296 Md. 414 (1983).
The role of the grand jury in New Jersey and Maryland is the same
as that of the grand jury in the federal system, and clearly does
ra Sita lia iio docu aiaabacalalll
9 at
did not rely on any opportunity PEPCO might have to
raise its preemption claim before the grand jury, since
there clearly is no such opportunity. Where the Third
Circuit declined to order abstention on the basis of a
possible future indictment, however, the court below held
that abstention was required precisely because of that
possibility.
The conflicting holdings of the Third Circuit and the
Fourth Circuit below cannot be reconciled. Nor is it
likely that either court will reconsider its holding. This
is not a situation in which arguments or theories not
raised hefore one court might cause that court to re-
evaluate its position, or a situation in which one court
had the benefit of guidance from this Court not available
to the other. Monaghan was decided after argument but
before decision below, and counsel alerted the court below
to the Monaghan decision. The court below was thus
fully aware of the views of the Third Circuit, but none-
theless adopted directly contrary reasoning and reached
the opposite conclusion. Judge Adams’s dissent in
Monaghan advanced the same arguments accepted by the
court below, and failed.to dissuade the Third Circuit from
its conclusion.’
not include the adjudication of legal claims such as those raised by
PEPCO. See United States v. Calandra, 414 U.S. 338, 345 (1974).
®If anything, Monaghan was a stronger case for abstention than
this one. In Monaghan, the federal plaintiffs’ claim was at least
directed to the conduct of the grand jury investigation itself, seek-
ing return of documents seized in the course of the investigation.
Here, the relief sought does not go directly to the operation of the
grand jury but only to the underlying law being applied. Indeed,
PEPCO has fully complied with the various subpoenas with which
it has been served.
—
7™The District Courts have also provided conflicting answers to
the question whether it is appropriate to abstain under Younger in
favor of a state grand jury investigation. See, e.g., Brennick v.
Hynes, 471 F. Supp. 863, 867 (N.D.N.Y. 1979) (Younger “does not
apply to state grand jury proceedings where the target for investi-
10
II. The Court Below Misinterpreted This Court’s Absten-
tion Decisions In Extending Younger To Grand Jury
Investigations
The court below correctly recognized that this Court
“has never addressed the issue of whether Younger ap-
plies to state grand jury proceedings.” App. 15a.
The decision to apply Younger in the present case, how-
ever, was not only directly contrary to that of the Third
Circuit but also inconsistent with this Court’s pronounce-
ments on abstention. The court below, like the lower
court in an earlier Supreme Court case, was “under the
misapprehension that the Younger doctrine applied when
there is a threatened state criminal prosecution as well
as when there is a state criminal prosecution already
pending.” Ellis v. Dyson, 421 U.S. 426, 433 (1975). No
prosecution is pending against PEPCO. The only action
the State has taken has been to commence an investiga-
tion of PEPCO, an investigation that is now in its nine-
teenth month. The fact that’ the State has invoked the
assistance of a grand jury as an investigative tool does
not transform the investigation into a pending state judi-
cial proceeding to which federal courts must defer.
Abstention under Younger is appropriate only if there
is an “ongoing state judicial proceeding” that “impli-
cate[s] important state interests” and if there is “an
gation has no immediate recourse to state courts’); Sovereign
News Co. V. Falke, 448 F. Supp. 306 (N.D. Ohio 1977) (Younger
abstention appropriate in favor of grand jury proceeding), re-
manded on other grounds, 610 F.2d 428 (6th Cir. 1979); Notey
v. Hynes, 418 F. Supp. 1320, 1826 (E.D.N.Y. 1976) (same). See
also Langley v. Ryder, 602 F. Supp. 335, 338-339 (W.D. La.)
(Younger abstention inapplicable when arrest warrants were issued
and arrests made but no indictments had been filed), aff’d on other
grounds, 778 F.2d 1092 (5th Cir. 1985); Four Unnamed Plaintiffs
v. Hall, 424 F. Supp. 357, 362 (D. Mass. 1976) (Younger does not
“require federal courts to avoid interference with state criminal
or administrative proceedings in the pre-indictment stage’) (em-
phasis in original), rev’d on other grounds, 550 F.2d 1291 (ist
Cir. 1977).
dint —s a
Ah 6 ee OOS Ret SATE NES Dita adits
A AP OLS Madi Dias el” 26 Ae.
6 te oust
il
adequate opportunity in the state proceedings to raise con-
stitutional challenges.” Middlesex County Ethics Comm.
v. Garden State Bar Ass’n, 457 U.S. 423, 432 (1982).
In this case there is no ongoing judicial proceeding af-
fording PEPCO any opportunity to raise its preemption
claim. A grand jury investigation is not a “judicial
proceeding” for abstention purposes. The court below dis-
missed this element of the test for abstention in a foot-
note, noting that “grand juries operate under the auspices
of the judicial branch.” App. 16a n.8. That is not,
however, the pertinent inquiry. Regardless of the extent
to which grand juries are or are not supervised by the
courts, the grand jury proceeding itself is not “ ‘judicial
in nature.’” Ohio Civil Rights Comm’n v. Dayton Chris-
tian Schools, Inc., 106 S. Ct. 2718, 2723 (1986) (quoting
Middlesex County, 457 U.S. at 433).
The requirement that the pending state proceedings be
“judicial in nature” to command abstention looks not to
the extent of supervision or control by the courts but
rather to the function and nature of the proceeding itself.
When this Court has extended Younger to state proceed-
ings that were not in the state courts themselves, those
proceedings have always been “judicial in nature” in
that the agencies had adjudicatory responsibilities and
functioned like courts, issuing a decision on the merits
after hearing from both sides of a dispute and affording
the affected private party an opportunity to present argu-
ments and evidence.
Thus, in Middlesex County, this Court held that ab-
stention was appropriate in favor of proceedings before
a state bar ethics committee. The Court looked to “the
nature of the proceedings” in determining that they could
8 Nor, in light of PEPCO’s preemption claim, can the grand jury
investigation be considered to implicate important state interests.
A state can have no legitimate interest in enforcing regulations
preempted by federal law. See infra at 20-25.
12
be considered “an ongoing state judicial proceeding” for
abstention purposes. Jd. at 435, 432. As the Court ncied:
[A] formal hearing on the complaint is held before
three or more members of the Ethics Committee, a
majority of whom must be attorneys. The lawyer
who is charged with unethical conduct may have
counsel, discovery is available, and all witnesses are
sworn. The panel is required to prepare a written
report with its findings of fact and conclusions. [Jd.
at 426-427. |
In other words, the ethics committee functioned like a
court in considering the charge and rendering its deci-
sion, and abstention was therefore appropriate.
Similarly, in Ohio Civil Rights Comm’n, this Court held
that absteniion was appropriate in favor of proceedings
before the state agency charged with adjudicating civil
rights complaints. Those proceedings were commenced by
the filing of a complaint, the charged party was given an
opportunity to respond, and the agency conducted a full
adversarial hearing. The charged party could appear in
person or through an attorney and could examine and
cross-examine witnesses. See 106 S. Ct. at 2721; Ohio
Rev. Code Ann. § 4112.05 (Supp. 1985). The agency
action constituted “a formal adjudication of the matter,”
and the proceeding could thus be considered “ ‘judicial in
nature’” for abstention purposes. 106 S. Ct. at 2721,
2723 (quoting Middlesex County, 457 U.S. at 433).
The agencies in both Middlesex County and Ohio Civil
Rights Comm’n functioned as courts, and the proceedings
before them thus “ ‘command the respect due court pro-
ceedings’” under Younger. Ohio Civil Rights Comm’n,
106 S. Ct. at 2723 (quoting Gibson v. Berryhill, 411 U.S.
564, 577 (1973)). In contrast, the Court declined to re-
quire abstention in favor of a state administrative pro-
ceeding in Hawaii Housing Authority v. Midkiff, 467
U.S. 229 (1984). The proceeding in that case was not a
formal adjudication similar to a court proceeding but
13
rather mandatory arbitration before the state agency.
See id. at 238. The mandatory arbitration was in ad-
vance of and not any part of the subsequent court action,
id., and the arbitration itself—unlike the formal agency
adjudication in Middlesex County and Ohio Civil Rights
Comm’n—could not be considered “judicial in nature.” °
A state grand jury proceeding is nothing like the
formal agency adjudication in Middlesex County and Ohio
Civil Rights Comm’n, or any of the other agency proceed-
ings in cases in which abstention has been ruled proper.
As the court noted in Monaghan, a state grand jury does
not have “the authority to adjudicate anything.” 798
F.2d at 637. A Maryland grand jury, like its counter-
parts in New Jersey and the federal system, “is an
accusing body, and not a judicial tribunal.” Coblentz v.
State, 164 Md. 558, 566, 166 A. 45, 49 (1933). “[A]
grand jury is an accusatory body which hears but one
side of a case, not a trier of fact which hears both sides
of a case and makes a determination accordingly.”
®In Ohio Civil Rights Comm’n, this Court cited with approval
four lower court decisions ruling that Younger could be applied to
state administrative proceedings that were “judicial in nature.”
106 S. Ct. at 2723 n.2. Those cases clearly indicate that abstention
is only appropriate when the pending proceeding itself is like a
court proceeding. See Williams v. Red Bank Board of Education,
662 F.2d 1008, 1015 (3d Cir. 1981) (abstention in favor of state
administrative proceeding that was “a quasi-judicial, adjudicatory
proceeding that in many respects resembles the judicial proceedings
to which Younger has already been held to command deference’’) ;
McCune v. Frank, 521 F.2d 1152, 1158 (2d Cir. 1975) (abstention
in favor of “trial” before state police disciplinary board) ; McDonald
v. Metro-North Commuter Railroad Division of Metropolitan Transit
Authority, 565 F. Supp. 37, 39 (S.D.N.Y. 1983) (abstention appro-
priate when claims could be raised in multi-tiered administrative
“trials”) ; Grandco Corp. v. Rochford, 536 F.2d 197, 206 (7th Cir.
1976) (abstention not appropriate when proceedings are not before
“any established adjudicatory body’).
aa
14
Bartram v. State, 280 Md. 616, 633, 374 A.2d 1144, 1152
(1977). As the Third Circuit emphasized in Monaghan:
A grand jury proceeds ex parte. * * * It can issue
an indictment, which is no more than a charge that
the defendant has violated the criminal law. Only
when such a charge is filed does there commence a
judicial proceeding that affords the adjudicatory
opportunity that Hawaii Housing and Middlesex
County require. [798 F.2d at 637 (footnote omit-
ted).]
It is the function of a grand jury to investigate and
charge—not to adjudicate." A grand jury investigation,
therefore, cannot be considered to constitute an ongoing
state proceeding that is “judicial in nature” for Younger
purposes.
Moreover, the various proceedings in favor of which
federal courts have abstained have been ones where the
federal claims could be raised and considered. PEPCO
had no opportunity—let alone an adequate opportunity—
to raise its preemption claim before the grand jury in-
vestigating its activities. The State does not suggest that
PEPCO could do so, and Maryland law rather clearly
precludes any effort by a grand jury witness or the tar-
get of an investigation to challenge the authority of the
grand jury to act.” Nor did the court below suggest
that PEPCO could raise its claim in the only state pro-
10 See United States v. Calandra, 414 U.S. at 343 (“A grand jury
proceeding is not an adversary hearing in which the guilt or
innocence of the accused is adjudicated”).
11 See United States v. Cleary, 265 F.2d 459, 461 (2d Cir.)
(“Basically the grand jury is a law enforcement agency”), cert.
denied, 360 U.S. 986 (1959).
12 See In re Special Investigation No. 2387, supra; In re Special
Investigation No. 224, 564 Md. App. at 145, 458 A.2d at 458 (“‘a
witness * * * is not interested to challenge the jurisdiction of
court or grand jury over the subject-matter that is under inquiry’ ”)
(quoting Blair v. United States, 250 U.S. 273, 279 (1919)).
15
ceeding then pending—the grand jury investigation.
Rather, the court required abstention because of the op-
portunity PEPCO would have to raise its claim in a
“separate” prosecution that might be commenced at some
point in the future. App. 18a.
This Court, however, has never required abstention
when the plaintiff had no present opportunity to raise
his federal claims in pending state adjudicatory proceed-
ings. Abstention results in dismissal of the federal suit
in order to permit the federal claims to be raised in the
pending state proceeding, not to preclude or delay litiga-
tion of those claims. If there is no pending proceeding
in which the federal claims can be adjudicated, there is
no justification for a federal court to abdicate jurisdic-
tion and deny the federal plaintiff any opportunity to
have his claims heard. In such a case, federal courts
must “fulfill their duty to adjudicate federal questions
properly brought before them.” Hawaii Housing Au-
thority v. Midkiff, 467 U.S. at 238.
The court below relied upon Middlesex County and
Ohio Civil Rights Comm’n for the proposition that “an
adequate opportunity exists when the federal plaintiff
can present its claim on judicial review of the state
administrative action or order.” App. 17a. Neither
Middlesex County nor Ohio Civil Rights Comm'n, how-
ever, based abstention on the mere possibility of an op-
portunity to raise federal claims at some point in the
future. In Middlesex County there was no question that
the federal claims could he raised and decided in the
pending agency proceeding, and the federal plaintiff could
raise those claims again on review in the state Supreme
Court. See 457 U.S. at 435-436, 427. The Court in
Ohio Civil Rights Comm’n assumed that the federal
claims could be considered in the pending agency pro-
ceeding,”* and noted that “[iJn any event” the claims
13 As the Court noted, “even if Ohio law is such that the Com-
mission may not consider the constitutionality of the statute under
16
could be raised through the judicial-review provided as
a matter of statutory right by the same law authorizing
the agency adjudication. 106 S. Ct. at 2724. The statute
specified that review actions “shall be heard and deter-
mined as expeditiously as possible.” Ohio Rev. Code Ann.
§ 4112.06(I) (1980). The agency adjudication and judi-
cial review were parts of a single pending proceeding,
and the federal plaintiff could raise his claims in that
proceeding. }
PEPCO, however, will only have an opportunity to
raise its claims “[i]f indicted.” App. 18a. A crim-
inal prosecution is not in any sense “judicial review” of
a grand jury proceeding. The two proceedings are en-
tirely separate and addressed to quite distinct questions."
“It is clear * * * that the investigation of a grand jury
is a proceeding which is wholly separate and distinct
from, and of a different nature than, the subsequent trial
of the defendant in the district court.” In re Neff, 206
F.2d 149, 152 (3d Cir. 1953). See United States v.
Coachman, 752 F.2d 685, 691 (D.C. Cir. 1985) (“A
grand jury investigating a suspect and a court trying
an accused * * * engage in separate and dissimilar func-
tions”)."* Indeed, the court below expressly acknowledged
that the grand jury proceeding was “separate” from any
possible future proceeding at which PEPCO could raise
its claims. App. 18a. Thus, even if Ohio Civil Rights
which it operates, it would seem an unusual doctrine * * * to say
that the Commission could not construe its own statutory mandate
in the light of federal constitutional principles.” 106 S. Ct. at 2724.
4 For example, a finding after trial that a defendant is innocent
does not mean that the grand jury was wrong in determining that
there was a sufficient basis for indictment.
See also United States v. Housand, 550 F.2d 818, 821 n3 (2d
Cir.) (grand jury proceeding and case growing out of it “separ-
ate”), cert. denied, 431 U.S. 970 (1977); United States v. Malone,
111 F. Supp. 37, 38-39 (N.D. Cal. 1953) (grand jury and later
case “independent” proceedings).
eee Ee
ae 12S. 42 eee
17
Comm’n is read most broadly as authorizing abstention
when claims can be raised on a judicial review that is
part of the pending adjudicatory proceeding, it does not
control the_present case. A grand jury investigation is
not an adjudicatory proceeding, a subsequent criminal
prosecution is not a part of that pending proceeding, and
such a prosecution is not a “review” of any adjudication
arising from that proceeding.
It is one thing to hold that abstention is proper when
federal claims can be raised on review of a pending pro-
ceeding; it is quite another to require abstention on the
basis of a possible separate future proceeding. Absten-
tion is only appropriate when “federal claims have been
or could be presented in ongoing judicial proceedings,”
Hawaii Housing Authority v. Midkiff, 467 U.S. at 237
(emphasis supplied), not when they could be presented
in proceedings that have yet to commence.’® The lack of
a particular pending proceeding indicates that an oppor-
tunity may never materialize, or that it may not mate-
rialize in timely fashion. Federal courts cannot take the
momentous step of dismissing an action within their
jurisdiction on the strength of such mere possibilities. As
the Court concluded in Steffel v. Thompson, 415 U.S. 452,
472 (1974): “Requiring the federal courts totally to step
aside when no state criminal prosecution is pending
against the federal plaintiff would turn federalism on its
head.”
As noted, the grand jury investigation in this case
has been pending for nineteen months, and PEPCO has
yet to be indicted. The investigation in Monaghan was
pending for eighteen months without indictment when
the Third Circuit issued its opinion. 798 F.2d at 634.
16 As this Court has said: “Younger v. Harris contemplates the
outright dismissal of the federal suit, and the presentation of all
claims, both state and federal, to the state courts. Such a course
naturally presupposes the opportunity to raise and have timely
decided by a competent state tribunal the federal issues involved.”
Gibson v. Berryhill, 411 U.S. at 577 (emphasis supplied).
18
The opportunity to raise federal claims in Ohio Civil
Rights Comm’n was available at the very latest upon
review of a then-pending proceeding. There is no telling
when—if ever—PEPCO will have the opportunity to
raise its federal claims.
The court below reasoned that PEPCO’s federal rights -
were fully protected since PEPCO could raise its-pre-
emption claim if indicted, apparently assuming that if
PEPCO were not indicted the issue would simply go
away. PEPCO, however, did not seek declaratory relief
simply to forestall indictment. As noted previously,
Maryland’s insistence on regulating PCBs in defiance of
the express preemption provision in federal law has di-
rectly affected PEPCO’s ongoing business operations,
quite apart from the subject matter of the grand jury
investigation. Even in the absence of possible indictment,
PEPCO would still have a compelling reason to seek
declaratory relief. The decision below permits the State
to deny PEPCO its right to have its federal claim de-
cided, simply by continuing the grand jury investigation.
So long as that investigation continues, PEPCO is pre-
cluded from raising its claim. Such a result is a perver-
sion of the principles animating Younger. The purpose
of Younger abstention is to have federal claims decided
in pending state judicial proceedings, not to permit a
State to hold such claims hostage awaiting the com-
mencement of such proceedings.
The decision below permits state authorities to pre-
clude access to federal court through the simple expe-
dient of invoking the aid of a grand jury in an investi-
gation. Apparently any involvement by a grand jury is
sufficient to mandate abstention under the ruling below.
Since grand juries operate ex parte and in secret, a plain-
tiff would typically have no way of knowing that his
federal suit was barred until after it was filed, if the
State chooses at that time to disclose the pendency of its
grand jury investigation.
19
Indeed, the State need not even commence its investi-
gation prior to the filing of the federal suit. Under Hicks
v. Miranda, 422 U.S. 332, 349-350 (1975), abstention is
required even when the state proceedings begin after
filing of the federal suit, so long as there have been no
proceedings of substance on the merits in the federal
suit. The decision below thus invites States to respond
to suit in federal court simply by initiating an investi-
gation directed at the federal plaintiff, thereby divest-
ing the federal court of jurisdiction
The ruling below also may well have the unintended
result of increasing the disruption of state proceedings
by federal courts that Younger was intended to prevent.
Under that ruling, it will be necessary for federal courts
to determine if in fact the federal plaintiff is the target
of a pending state grand jury investigation. The neces-
sity of such a finding not only deprives the grand jury
of the secrecy that is often critical to its investigative
efforts,’7 but also may require the federal court to scru-
tinize and intrude upon the operations of the state grand
jury. If the federal plaintiff challenges the State’s asser-
tion that he is the target of a grand jury investigation,
some factfinding by the District Court will be necessary
to resolve the dispute. Such factfinding could well include
testimony by the state prosecutor and the grand jurors
themselves, as well as review of testimony and evidence
presented to the grand jury to determine if the federal
plaintiff is in fact a target. Presumably it would be
necessary to permit discovery on these issues. It is dif-
ficult to discern how such necessary proceedings would
promote the “proper respect for state functions” under-
lying Younger, 401 U.S. at 44.%
17 See United States v. Sells Engineering, Inc., 463 U.S. 418, 425
(1983) (“the traditional rule of grand jury secrecy”); United
States v. Johnson, 319 U.S. 508, 518 (1948) (“the indispensable
secrecy of grand jury proceedings’’).
18 These issues are not merely hypothetical. In Monaghan v.
Deakins, 798 F.2d at 636 n.4, the plaintiffs claimed that they were
20
Nor is there any apparent reason to restrict the deci-
sion below to investigations aided by a grand jury. The
States are not required to employ grand juries,” and in
many States prosecutors are authorized to “ ‘take[] the
place of a grand jury’” in conducting investigations.
Kaylor v. Fields, 661 F.2d 1177, 1182 (8th Cir. 1981)
(quoting Johnson v. State, 199 Ark. 196, 204, 133 S.W.2d
15, 18 (1939) ).
The logic of the court below would seem to require
abstention in favor of any pending state investigation:
if the investigation—however conducted—culminates in a
prosecution, the defendant can raise his federal claims
at that point. The fact that such a result is implicit in
the ruling below simply highlights the fundamental error
in requiring abstention in favor of a mere investigation
rather than an actual prosecution.
III. The Court Below Erred In Requiring Abstention In A
Case Involving A Preemptive Federal Statute
As noted above and as the court below recognized, “the
Supreme Court has never analyzed the treatment of a
preemption claim in applying the Younger doctrine.”
App. 16a n.7. At least six other Circuits have, how-
ever, and each has held—contrary to the decision below—
that Younger generally does not apply in a preemption
case. Indeed, application of the contrary rule adopted
by the court below would have meant that several of
this Court’s most important decisions holding that fed-
eral law preempted state law would never have been
not in fact subject to a state grand jury investigation, and the
Court of Appeals noted that the finding by the District Court that _
they were was not supported by the sources cited by the District
Court. The holding of the Third Circuit that abstention was not
appropriate in favor of grand jury proceedings avoided the necessity
of resolving the factual challenge.
19 See Rose v. Mitchell, 443 U.S. 545, 557 n.7 (1979); Hurtado v.
California, 110 U.S. 516 (1884).
21
decided, given the pendency of some kind of state in-
vestigative effort directed against the plaintiff at the
time the preemption ruling was sought.”
The decision in Younger was based on “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.” 401 U.S. at 44. When
Congress expressly preempts state jurisdiction, however,
it has determined that state regulation is not a separate
“state function” that the State should be left free to
perform in its “separate way.” Abstaining in such a
case permits the State to do precisely what Congress has
decreed it must not do. Congress is free under the
Supremacy Clause to preempt state law, and at least when
Congress has expressly done so, federal courts should not
undermine that determination by deferring to preempted
state proceedings.” For these reasons, Courts of Appeals
in the Second, Third, Fifth, Eighth, Ninth, and Fleventh
Circuits have held that abstention under Younger is gen-
erally not appropriate in a preemption case.
In Stone & Webster Engineering Corp. v. Ilsley, 690
F.2d 323 (2d Cir. 1982), affd mem. sub nom. Arcudi V.
Stone & Webster Engineering Corp., 463 U.S. 1220
(1983), the Second Circuit considered an ERISA pre-
emption claim, and declined to abstain in favor of a
pending state proceeding. As the court concluded: ‘“Ab-
stention * * * under the doctrine of Younger v. Harris
* * * is not appropriately invoked in a preemption case.”
690 F.2d at 326 n.2. See also id. at 326 n.3; Marshall
2° See, e.g., Jones Vv. Rath Packing Co., 430 US. 519 (1977) ;
Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691 (1984).
21 See 1A Moore’s Federal Practice { 0.203[2] at 2141 (“Where
the very existence of the challenged state regulatory scheme vio-
lates a federal statute that preempts the field, neither Pullman,
Burford, nor Younger abstention may be appropriate’).
_ 22
v. Chase Manhattan Bank, 558 F.2d 680, 683-684 (2d
Cir. 1977) .?
This same approach to abstention in preemption cases
was followed by the Third Circuit in Hotel & Restaurant
Employees International Union v. Danziger, 709 F.2d 815
(3d Cir. 1988), vacated on other grounds, 468 U.S. 491
(1984). In that case a union sought a declaratory judg-
ment that the labor provisions of the New Jersey Casino
Control Act were preempted by federal labor law and
ERISA. The court rejected the argument that it should
abstain in favor of a pending state proceeding, conclud-
ing that “when the issue tendered to a federal district
court is the very power, as a matter of federal law, to
entertain a threatened proceeding, the principles of comity
and federalism which apparently animate the Younger v.
Harris rule are totally inapplicable.” 709 F.2d at 833.%
22In Marcal Paper Mills, Inc. v. Ewing, 790 F.2d 195 (1st Cir.
1986), the First Circuit expressed “ho opinion as to * * * whether
or not there should be a preemption exception to the Younger ab-
stention doctrine,” but it did recognize that the Second Circuit has
held “that Younger abstention is generally inappropriate * cases
involving issues of federal preemption.” Jd. at 198 (citing Stone &
Webster Engineering Corp. v. Ilsley, supra). See also Town of
Springfield, Vermont v. McCarren, 549 F. Supp. 1134, 1153 (D. Vt.
1982) (court declines to abstain under Younger because “the cus-
tomary deference to state enforcement efforts is suspended when
* * * the plaintiffs’ challenge is that those efforts are preempted’’),
aff'd mem., 722 F.2d 728 (2d Cir.), cert. denied, 464 U.S. 942
(1983).
23In Kentucky West Virginia Gas Co. v. Pennsylvania Public
Utility Comm’n, 791 F.2d 1111, 1116-17 (3d Cir. 1986), another
panel of the Third Circuit noted in passing that it would be an
“overstatement” to suggest that Younger was never appropriate
in a preemption case, but cited the fact that the federal claim was
one of preemption as a factor counselling against the application of
Younger. The court held that the District Court erred in abstain-
ing. In United Services Automobile Ass’n v. Muir, 792 F.2d 356,
364 n.4 (3d Cir. 1986), the court referred to the holding in Kentucky
West Virginia Gas Co. that “preemption questions are often not
23
In South Central Bell Telephone Co. v. Louisiana Public
Service Comm’n, 744 F.2d 1107 (5th Cir. 1984), vacated
and remanded on other grounds, 106 S. Ct. 2884 (1986),
the court declined to apply Younger abstention to a claim
that federal law preempted state regulation of telephone
service. As the court noted, “the claim presented here is
predicated upon a naked exercise of the federal preemp-
tion power.” Under such circumstances, it is “well-
established” that the concern of “ ‘avoiding needless fed-
eral court intervention into important matters within
the state’s jurisdiction * * * obviously is lacking.’ ” Id. at
1123 (quoting Aluminwm Company of America v. Util-
ities Commission of North Carolina, 713 F.2d 1024, 1030
(4th Cir. 1983), cert. denied, 465 U.S. 1052 (1984) .™
The Eighth Circuit similarly held that Younger ab-
stention was not appropriately involved in a preemption
ease in Middle South Energy, Inc. v. Arkansas Public
Service Comm’n, 772 F.2d 404, 417 (8th Cir. 1985), cert.
denied, 106 S. Ct. 884 (1986). The federal plaintiff al-
leged that the Federal Power Act preempted efforts by
a state utility commission to regulate contracts for the
suitable for abstention under the doctrines announced in Burford
and Younger.”
24 New Orleans Public Service, Inc. v. City of New Orleans, 798
F.2d 858 (5th Cir. 1986), is not to the contrary. The court in that
case upheld abstention under Burford v. Sun Oil Co., 319 U.S. 315
(1943), noting only in dicta that Younger abstention also “seems
appropriate” and “could be” the basis for the District Court’s de-
cision to abstain. 798 F.2d at 863-864. The court expressly rec-
ognized that “abstention in the face of a federal preemption claim
is, at a minimum, problematical.” Jd. at 860. It upheld abstention
only because of the “particular structure” of the federal statute
at issue in that case. 7d. Far from expressly preempting state law
—as does the statute at issue in this case—the statute in New Or-
leans Public Service expressly “preserved to the states” jurisdic-
tion over the subject of the federal plaintiff’s claim. Id. at 864, 860.
Indeed, the court specifically cautioned that its holding should not
necessarily apply “in cases presenting other types of federal! pre-
emption claims.” Jd. at 861.
24
interstate purchase of power, much as PEPCO alleges
in this case that a federal statute preempts efforts by
Maryland to regulate PCBs. The court declined to ab-
stain in favor of pending proceedings before the Com-
mission, reasoning that the comity underlying Younger
is not strained when a federal court cuts off state
proceedings that entrench upon the federal do-
main. The legitimate state interest contemplated by
Younger does not exist when the state action has
been preempted or foreclosed by the Constitution.
[772 F.2d at 417 (citations omitted) .]
In Champion International Corp. v. Brown, 731 F.2d
1406 (9th Cir. 1984), the plaintiff filed suit in Federal
District Court, alleging that Montana’s age discrimina-
tion law was preempted by ERISA. The District Court
abstained under Younger in favor of pending state ad-
ministrative and court proceedings, and the Ninth Cir-
cuit reversed. The Court of Appeals recognized that
Younger abstention is only appropriate if the pending
state proceeding implicates important state interests, and
held that a state can have no interest in enforcing state
laws expressly preempted by Congress. Jd. at 1408-09.
Baggett v. Department of Professional Regulation, 717
F.2d 521 (11th Cir. 1983), involved an action by a ma-
rine pilot seeking to enjoin a state inquiry into his pilot-
ing of a tugboat. The pilot claimed that his actions were
subject to the exclusive regulation of the U.S. Coast
Guard. The State argued that the District Court should
abstain in favor of the state proceeding, and that court
agreed. On appeal, the Eleventh Circuit held that the
District Court erred in abstaining: “When preemption
is readily apparent, * * * and, because of preemption,
the state tribunal is acting beyond the lawful limits of
its authority, abstention can serve no principles of ‘com-
ity’ or of ‘our federalism.’” Id. at 524.
25 Like the court in Kentucky West Virginia Gas Co., supra, the
Eleventh Circuit remarked in dicta that it would be an “overstate-
25
The court below simply ignored the foregoing, dis-
missing the argument that abstention does not apply in
a preemption case in a brief footnote. See App. l6a
n.7. In contrast to the six Circuits surveyed above, the
court below held that “the same logic requiring absten-
tion when there is a constitutional challenge * * * ap-
plies to litigation where there is a claim of federal pre-
emption.” Jd. The court stated that it would be “anomal-
ous” to hold that abstention is appropriate for constitu-
tional but not preemption issues.
No such anomaly exists. In a typical case in which
_abstention is appropriate, the federal claim is not that
the State is entirely disabled from acting in the area.
In Ohio Civil Rights Comm’n, for example, the claim
was not that the State could not enforce civil rights
laws, but that they could not be applied in a manner that
interfered with the federal plaintiffs’ rights under the
Free Exercise Clause. In a preemption case such as the
present one and those discussed above, the claim is quali-
tatively different. It is that any action the State takes
in the area would contravene federal law. Here, PEPCO’s
claim is that Congress has expressly preempted state
regulation of PCBs. Abstaining from deciding this claim
in favor of possible state proceedings would deprive
PEPCO of the very right it seeks to have vindicated—
the right to be free of state regulation of PCBs.
ment” to assert that Younger abstention was never appropriate
in a preemption case. 717 F.2d at 524. The judicious reluctance of
the court to announce an absolute rule, applicable in every conceiv-
able case, certainly does nothing to diminish the conflict with the
ruling of the court below that preemption claims should be treated
no differently than other federal claims for abstention purposes.
The Baggett and Kentucky West Virginia Gas Co. courts were pre-
sumably concerned about cases in which the preemption claim was
clearly spurious and perhaps raised only to avoid abstention, a sit-
uation hardly presented by this case, in which federal preemption is
express and preemption is the sum and substance of the plaintiff’s
claim.
26
IV. The Uniform Resolution Of The Questions Presented
Is Of Overriding Importance To The Smooth Function-
ing Of The Federal System
The issues over which the Fourth Circuit has split from
the other Circuits are ones on which there is a clear
need for national uniformity. The same principles ani-
mating the Younger doctrine require that Younger be
applied in a consistent fashion to identical proceedings in
different States.
Younger was based on “a proper respect for state
functions, a recognition of the fact that the entire coun-
try is made up of a Union of separate state govern-
ments.” 401 U.S. at 44. Such respect is hardly fostered
when the federal courts effectively differentiate among
the States for purposes of abstention. If the ruling be-
low stands, federal courts will defer to the grand jury
proceedings of Maryland, Virginia, North Carolina, South
Carolina, and West Virginia,. but not to those of Penn-
sylvania, New Jersey, and Delaware. In the Second,
Third, Fifth, Eighth, Ninth, and Eleventh Circuits, fed-
eral courts generally do not abstain in favor of state
proceedings when the federal plaintiff claims Congress
has expressly preempted state law. In the Fourth Cir-
cuit, they will. A “proper respect” for the States by the
federal judiciary requires, at the very least, that the
federal judiciary not treat identical state proceedings
differently depending on the State in which they take
place. =
For the reasons developed above, “sensitivity to the
legitimate interests of both State and National Govern-
ments,” id., does not require abstention by federal courts
in favor of pending state grand jury investigations. If |
federal courts do abstain in favor of the grand jury
proceedings of New Jersey, however, this sensitivity re-
quires that they similarly defer to grand jury proceed-
ings of Maryland, or that if they do not defer to Mary-
land proceedings, they similarly not defer to New Jersey
27
proceedings. By the same token, a federal court in New
York presented with a claim based on federal preemption
will not abstain in favor of New York State proceedings,
while a federal court in Maryland presented with the
identical claim under the same federal statute will ab-
stain in favor of identical Maryland proceedings.
There are situations in which the uniform application
of federal law, while always desirable, is not critical. In
some cases Congress can resolve any conflict in inter-
pretation, or a conflict may be tolerated for several
years as issues are refined and sharpened. The absten-
tion doctrine, however, was created by this Court; only
this Court can ensure its uniform application. And dis-
parity in treatment of the sovereign States by the lower
federal courts is not an issue on which conflict may be
tolerated. Review by this Court is necessary to ensure
uniformity in this delicate area of state-federal rela-
tions.
The issue over which the Third and Fourth Circuits
have split will arise repeatedly. Grand juries are con-
stantly sitting in States throughout this country.* In
some cases they act, and in others they do not. To hold
that the mere pendency of such secret proceedings—or
of other investigative procedures—suffices to preclude a
legitimate claim of federai preemption from being raised
and decided would effect a dramatic shift in present law.
At the very least it would mean that grand jurors and
prosecutors could act unchecked on the basis of state laws
expressly preempted by Congress. Such a power in the
hands of prosecutors should not be sanctioned without
this Court’s approval. Indeed, the decision below could
well prompt changes in state investigative practices,
26 Grand jury indictments are required for specified crimes in
half the States, and the use of a grand jury is optional at the dis-
cretion of the prosecutor in the other States. National Institute
of Justice, Grand Jury Reform: A Review of Key Isswes 12 (1983).
28
with prosecutors going through the formality of enlist-
ing the aid of a grand jury at the earliest stages of an
investigation to insulate the investigation from any scru-
tiny by federal courts.
Similarly, the large number of Circuits that have re-
cently addressed the question of the appropriateness of
abstention in federal preemption cases demonstrates
that the issue arises with great frequency.. This Court
should grant the writ to resolve the existing conflict
among the Circuits and provide definitive guidance to
the lower federal courts on these significant and recurring
issues of federal jurisprudence.
CONCLUSION
For the foregoing reasons, this Court should grant the
writ and reverse the decision of the court below.
Respectfully submitted,
E. BARRETT PRETTYMAN, JR.*
SHERWIN J. MARKMAN
~JOHN C. KEENEY, JR.
Davip J. HAYES
JOHN G. ROBERTs, JR.
HOGAN & HARTSON
(a partnership including
professional corporations)
815 Connecticut Ave., N.W.
Washington, D.C. 20006
(202) 331-4685
ARNOLD W. WEINER
Of Counsel: MICHAEL SCHATZOW
KATHLEEN B. DEWEESE ETHAN L. BAUMAN
Associate General Counsel MELNICOVE, KAUFMAN, WEINER,
POTOMAC ELECTRIC Smouse & Garsts, P.A.
PowER COMPANY 36 South Charles St.
1900 Pennsylvania Ave., N.W. Baltimore, MD 21201
Washington, D.C. 20068 (301) 332-8525
(202) 872-2520 Counsel for Petitioner
* Counsel of Record
APPENDICES
fi Meear
nay iets
la
APPENDIX A
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 86-1572
THE POTOMAC ELECTRIC POWER COMPANY,
Appellant,
versus
STEPHEN H. SACHS, in his capacity as Attorney General
of Maryland* ADELE WILZACK, in her capacity as
Secretary of the Maryland Department of Health and
Mental Hygiene,
Appellees,
STATE OF NEW YORK
Amicus Curiae,
STATE OF ALABAMA,
Amicus Curiae,
NIAGARA MOHAWK POWER CORPORATION,
Amicus Curiae,
EDISON ELECTRIC INSTITUTE,
Amicus Curiae,
NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION,
Amicus Curiae,
AMERICAN PUBLIC POWER ASSOCIATION,
Amicus Curiae,
AMERICAN ELECTRIC POWER SERVICE CORPORATION,
Amicus Curiae,
APPALACHIAN POWER COMPANY,
Amicus Curiae,
2a
CoLuMBUS & SOUTHERN OHIO ELECTRIC COMPANY,
Amicus Curiae,
INDIANA & MICHIGAN ELECTRIC COMPANY,
Amicus Curiae,
OHIO POWER COMPANY,
Amicus Curiae,
ATLANTIC CITY ELECTRIC COMPANY,
Amicus Curiae,
BALTIMORE GAS & ELECTRIC COMPANY,
Amicus Curiae,
CENTRAL HUDSON GAS & ELECTRIC CORPORATION,
Amicus Curiae,
CENTRAL ILLINOIS LIGHT COMPANY,
Amicus Curiae,
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY,
Amicus Curiae,
CENTRAL & SOUTH WEST SERVICES,
Amicus Curiae,
COMMONWEALTH EDISON COMPANY,
Amicus Curiae,
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.,
Amicus Curiae,
DAYTON POWER & LIGHT COMPANY,
Amicus Curiae,
DELMARVA POWER & LIGHT COMPANY,
Amicus Curiae,
DUKE POWER COMPANY,
Amicus Curiae,
DUQUESNE LIGHT COMPANY,
Amicus Curiae,
FLORIDA POWER & LIGHT COMPANY,
Amicus Curiae,
OO
3a
HousTON LIGHTING & POWER COMPANY,
Amicus Curiae,
ILLINOIS POWER COMPANY,
Amicus Curiae,
INDIANAPOLIS POWER & LIGHT COMPANY,
Amicus Curiae,
IowA Power & LIGHT COMPANY,
Amicus Curiae,
CINCINATTI GAS & ELECTRIC COMPANY,
Amicus Curiae,
IowA PUBLIC SERVICE COMPANY,
Amicus Curiae,
JERSEY CENTRAL POWER & LIGHT COMPANY,
Amicus Curiae,
MADISON GAS & ELECTRIC COMPANY,
Amicus Curiae,
MINNESOTA POWER & LIGHT COMPANY,
Amicus Curiae,
MONOGAHELA POWER COMPANY,
Amicus Curiae,
MONTAUP ELECTRIC COMPANY,
Amicus Curiae,
NEW ENGLAND PoWER COMPANY,
Amicus Curiae,
NEW YorRK STATE ELECTRIC & GAS CORPORATION,
Amicus Curiae,
OHIO VALLEY ELECTRIC CORPORATION,
Amicus Curiae,
OKLAHOMA GAS & ELECTRIC COMPANY,
Amicus Curiae,
PaciFic GAS & ELECTRIC COMPANY,
Amicus Curiae,
4a
PaciFic PowEr & LIGHT CoMPANY,
Amicus Curiae,
PENNSYLVANIA POWER & LIGHT COMPANY,
Amicus Curiae,
PHILADELPHIA ELECTRIC COMPANY,
Amicus Curiae,
PUBLIC SERVICE ELECTRIC & GAS COMPANY,
Amicus Curiae,
PUBLIC SERVICE COMPANY OF INDIANA, INC.,
Amicus Curiae,
SOUTHERN CALIFORNIA EDISON COMPANY,
Amicus Curiae,
SOUTHERN COMPANY SERVICES, INC.,
Amicus Curiae,
ALABAMA POWER COMPANY,
Amicus Curiae,
GEORGIA POWER COMPANY,
Amicus Curiae,
GULF PowWER COMPANY,
Amicus Curiae,
MISSISSIPPI POWER COMPANY,
Amicus Curiae,
TAMPA ELECTRIC COMPANY,
Amicus Curiae,
TEXAS UTILITIES GENERATING COMPANY, |
Amicus Curiae,
CLEVELAND ELECTRIC ILLUMINATING COMPANY,
Amicus Curiae,
DETROIT EDISON COMPANY,
~ Amicus Curiae,
POTOMAC EDISON COMPANY,
Amicus Curiae,
5a
TOLEDO EDISON COMPANY,
Amicus Curiae,
UNION ELECTRIC COMPANY,
Amicus Curiae,
VIRGINIA ELECTRIC POWER COMPANY,
Amicus Curiae,
WEST PENN POWER COMPANY,
Amicus Curiae,
WISCONSIN ELECTRIC POWER COMPANY,
Amicus Curiae,
WISCONSIN POWER & LIGHT COMPANY,
Amicus Curiae,
WISCONSIN PUBLIC SERVICE CORPORATION,
Amicus Curiae,
CHESAPEAKE BAY FOUNDATION,
Amicus Curiae,
NATURAL RESOURCES DEFENSE COUNCIL, INC.,
Amicus Curiae,
UNITED STATES OF AMERICA,
Amicus Curiae.
No. 86-1573
THE POTOMAC ELECTRIC POWER COMPANY,
Appellee,
versus
STEPHEN H. SACHS, in his capacity as Attorney General
of Maryland; ADELE WILZACK, in her capacity as
Secretary of the Maryland Department of Health and
Mental Hygiene,
Appellants,
6a
STATE OF NEW YORK,
Amicus Curiae,
STATE OF ALABAMA,
Amicus Curiae,
NIAGARA MOHAWK POWER CORPORATION,
Amicus Curiae,
EDISON ELECTRIC INSTITUTE,
Amicus Curiae,
NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION,
Amicus Curiae,
AMERICAN PUBLIC POWER ASSOCIATION,
Amicus Curiae,
AMERICAN ELECTRIC POWER -SERVICE CORPORATION,
Amicus Curiae,
APPALACHIAN POWER COMPANY,
Amicus Curiae,
CoLUMBUS & SOUTHERN OHIO ELECTRIC COMPANY,
Amicus Curiae,
INDIANA & MICHIGAN ELECTRIC COMPANY,
Amicus Curiae,
OHIO POWER COMPANY,
Amicus Curiae,
ATLANTIC CITY ELECTRIC COMPANY,
Amicus Curiae,
BALTIMORE GAS & ELECTRIC COMPANY,
Amicus Curiae,
CENTRAL HUDSON GAS & ELECTRIC CORPORATION,
Amicus Curiae,
CENTRAL ILLINOIS LIGHT COMPANY,
Amicus Curiae,
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY,
Amicus Curiae,
Ta
CENTRAL & SOUTH WEST SERVICES,
Amicus Curiae,
CINCINNATI GAS & ELECTRIC COMPANY,
Amicus Curiae,
COMMONWEALTH EDISON COMPANY,
Amicus Curiae,
CONSOLIDATED EDISON COMPANY OF NEW YORK,
Amicus Curiae,
DAYTON POWER & LIGHT COMPANY,
Amicus Curiae,
DELMARVA POWER & LIGHT COMPANY,
Amicus Curiae,
DUKE POWER COMPANY,
Amicus Curiae,
DUQUESNE LIGHT COMPANY
Amicus Curiae,
FLORIDA POWER & LIGHT COMPANY,
Amicus Curiae,
HOUSTON LIGHTING & POWER COMPANY,
Amicus Curiae,
ILLINOIS POWER COMPANY,
Amicus Curiae,
INDIANAPOLIS POWER & LIGHT COMPANY,
Amicus Curiae,
IowA POWER & LIGHT COMPANY,
Amicus Curiae,
IOWA PUBLIC SERVICE COMPANY,
Amicus Curiae,
JERSEY CENTRAL POWER & LIGHT COMPANY,
Amicus Curiae,
MADISON GAS & ELECTRIC COMPANY,
Amicus Curiae,
INC.,
8a
MINNESOTA POWER & LIGHT COMPANY,
Amicus Curiae,
MONOGAHELA POWER COMPANY,
Amicus Curiae,
MONTAUP ELECTRIC COMPANY,
Amicus Curiae,
NEW ENGLAND POWER COMPANY,
Amicus Curiae,
NEW YoRK STATE ELECTRIC & GAS CORPORATION,
Amicus Curiae,
OHIO VALLEY ELECTRIC CORPORATION,
Amicus Curiae,
OKLAHOMA GAS & ELECTRIC COMPANY,
Amicus Curiae,
PAcIFIC GAS & ELECTRIC COMPANY,
Amicus Curiae,
PACIFIC POWER & LIGHT COMPANY,
Amicus Curiae,
PENNSYLVANIA POWER & LIGHT COMPANY,
Amicus Curiae,
PHILADELPHIA ELECTRIC COMPANY,
Amicus Curiae,
PUBLIC SERVICE ELECTRIC & GAS COMPANY,
Amicus Curiae,
PUBLIC SERVICE COMPANY OF INDIANA, INC.,
Amicus Curiae,
SOUTHERN CALIFORNIA EDISON COMPANY,
Amicus Curiae,
SOUTHERN COMPANY SERVICES, INC.,
Amicus Curiae,
ALABAMA POWER COMPANY,
Amicus Curiae,
9a
GEORGIA POWER COMPANY,
Amicus Curiae,
GULF POWER COMPANY,
Amicus C WAGE,
MISSISSIPPI POWER COMPANY,
Amicus Curiae,
TAMPA ELECTRIC COMPANY,
Amicus Curiae,
TEXAS UTILITIES GENERATING COMPANY,
Amicus Curiae,
CLEVELAND ELECTRIC ILLUMINATING COMPANY,
Amicus Curiae,
DETROIT EDISON COMPANY,
Amicus Curiae,
POTOMAC EDISON COMPANY,
Amicus Curiae,
TOLEDO EDISON COMPANY,
Amicus Curiae,
UNION ELECTRIC COMPANY,
Amicus Curiae,
VIRGINIA ELECTRIC POWER COMPANY,
Amicus Curiae,
WEST PENN POWER COMPANY,
Amicus Curiae,
WISCONSIN ELECTRIC POWER COMPANY,
Amicus Curiae,
WISCONSIN POWER & LIGHT COMPANY,
Amicus Curiae,
WISCONSIN PUBLIC SERVICE CORPORATION,
Amicus Curiae,
CHESAPEAKE BAY FOUNDATION,
Amicus Curiae,
10a
NATURAL RESOURCES DEFENSE COUNCIL, INC.,
Amicus Curiae,
UNITED STATES OF AMERICA,
Amicus Curiae.
Appeal from the United States District Court
for the District of Maryland, at Baltimore.
Walter E. Black, Jr., United States District Judge.
(CA-86-220-B).
Argued: July 14, 1986 Decided: October 17, 1986
Before PHILLIPS, SPROUSE and CHAPMAN, Circuit Judges.
Arnold M. Weiner (Michael Schatzow; Ethan L. Bau-
man; Melnicove, Kaufman, Weiner & Smouse on brief) ;
E. Barrett Prettyman, Jr. (Sherwin J. Markman; John
C. Keeney, Jr.; David J. Hayes; Hogan & Hartson;
Kathleen B. DeWeese, Associate General Counsel, Po-
tomac Electric Power Company, on brief) for Appel-
lant/cross Appellee; Ralph S. Tyler, Assistant Attorney
General (Stephen H. Sachs, Atorney General; Richard
M. Hall, Michael C. Powell, Kathie A. Stein, Charles R.
Taylor, Jr., Assistant Attorneys General on brief) for
Appellees/cross Appellants; Karen L. Florini, United
States Department of Justice, (F. Henry Habicht, II,
Assistant Attorney General; Jacques B. Gelin; Margaret
A. Hill; United States Department of Justice; Francis
S. Blake, General Counsel; Bruce M. Diamond, Regional
Counsel; Terrell Hunt, Associate Enforcement Counsel;
Alan H. Carpien; Environmental Protection Agency on
brief) for Amicus Curiae United States of America;
(Robert Abrams, Attorney General of the State of New
York; Lawrence A. Rappoport, Associate Attorney; Nancy
Stearns, Assistant Attorney General; John K. Van de
oa
lla
Kamp, Attorney General of State of California; Theodora
Berger, Assistant Attorney General; Timothy R. Patter-
son, Deputy Attorney General; Charles A. Graddick, At-
torney General of the State of Alabama; Craig Kneisel,
Assistant Attorney General; Joseph I. Lieberman, Attor-
ney General of the State of Connecticut; Kenneth Ted-
ford, Assistant Attorney General on brief) for Amici
Curiae State of New York, et al; (Ann Powers, Vice
President and General Counsel; Catherine A. Cotter on
brief) for Amicus Curiae Chesapeake Bay Foundation,
Inc.; (Jacqueline M. Warren; Donald S. Strait, Lawanda
Still, Legal Assistant on brief) for Amicus Curiae Na-
tural Resources Defense Council, Inc.; (William L. Ko-
vacs; Henry W. Killeen, III; Donald S. Stefanski;
Jaeckle, Fleischmann & Mugel; Joseph F. Cleary, Assist-
ant Secretary and General Attorney, Niagara Mohawk
Power Corporation on brief) for Amicus Curiae Niagara
Mohawk Power Corporation; (J. Thomas Wolfe; Lynne
H. Church on brief) for Amicus Curiae Baltimore Gas
and Electric Company; (Toni K. Allen; Mary F. Edgar;
Piper & Marbury on brief) for Amici Curiae Edison
Electric Institute, et al.
SPROUSE, Circuit Judge:
The Potomac Electric Power Company (PEPCO) ap-
peals from the district court’s summary judgment in
favor of Steven Sachs, Attorney General of the State
of Maryland (Maryland), in PEPCO’s declaratory judg-
ment action. PEPCO sought a judgment holding that the
federal Toxic Substances Control Act (TSCA)' preempts
Maryland’s hazardous waste laws and regulations,? which,
among other things, govern the use and disposal of poly-
chlorinated biphenyls (PCBs). PEPCO also sought re-
115 U.S.C. § 2601 et seq.
2Md. Health-Envtl. Code Ann. §§ 7-101 et seq., 9-301 et seq.
(1982); Md. Admin. Code tit. 10, §51 (Disposal of Controlled
Hazardous Substances).
12a
lief preventing Maryland from enforcing those laws and
regulations against PEPCO. The district court denied
PEPCO’s motion for summary judgment and instead
held that TSCA did not preempt the challenged state
statutes. On appeal, PEPCO primarily contends that the
district court erred because a plain reading of TSCA
clearly indicates Congress’ intent that the Act preempt
any state regulation of PCB disposal.*
On cross-appeal, Maryland, of course, agrees with the
district court’s decision on the merits, but argues that
the court erred by refusing to abstain in deference to
previously instituted grand jury proceedings. Maryland
had initiated the grand jury proceeding to investigate
whether PEPCO had violated Maryland’s criminal laws
and regulations governing hazardous waste disposal.
These proceedings were in progress at the time this de-
claratory judgment action was filed. We agree with
Maryland and hold that the district court should have
abstained.
PEPCO is the electric utility corporation serving the
District of Columbia and some of its suburbs in Mary-
land and Virginia. Historically, it has used electrical
transformers filled with mineral oil. In many of the
transformers, the oil was permanently contaminated with
PCBs during the manufacturing process. PCBs are
highly toxic materials. PEPCO disposed of the obsolete
transformers involved here by sale through competitive
bids to scrap metal dealers—in this instance to United
Rigging and Hauling, Inc. (United Rigging), of Belts-
ville, Maryland. Pursuant to their contract, United Rig-
ging transported the obsolete transformers from PEPCO’s
District of Columbia testing facility. to United Rigging’s
-_~
3It is of no consequence in light of our decision on abstention,
but there is no merit to Maryland’s argument that the district
court lacked jurisdiction. See Lawrence County v. Lead-Deadwood
School District, US. , 105 S. Ct. 695, 698 n.6 (1985);
Shaw v. Delia Air Lines, Inc., 463 U.S. 85, 96 n.14 (1983).
a ee ee
13a
salvage yard in Maryland where the scrapping activities
were carried out.
In 1985, Maryland’s Waste Management Administra-
tion determined that United Rigging’s salvage yard and
a nearby creek were contaminated with PCBs. Follow-
ing that determination, PEPCO and United Rigging en-
tered into an Administrative Consent Order with the
State of Maryland and the Environmental Protection
Agency to conduct a cleanup of the site under the Com-
prehensive Environmental Response, Compensation, and
Liability Act of 1980.4 In April of 1985, the Attorney
General of Maryland commenced a grand jury criminal
investigation of PEPCO’s and United Rigging’s roles in
scrapping the transformers and dispésing of the hazardous
material. It appears the grand jury was on the verge
of indicting PEPCO.*
Against this background of state activity, PEPCO
brought this declaratory judgment action in the United
States District Court for the District of Maryland, seek-
ing a declaration that provisions of TSCA preempt Mary-
land’s laws and regulations on hazardous waste disposal.®
PEPCO filed a motion for summary judgment and the
district court, ruling against PEPCO, held that TSCA
does not preempt Maryland’s hazardous waste disposal
laws and regulations. PEPCO appeals from this decision
and Maryland cross-appeals from the district court’s re-
4 42 U.S.C. § 9601 et seq.
5In its opinion, the district court concluded that “an indictment
of PEPCO for_alleged responsibility for or participation in the
United Rigging contamination is imminent.” United Rigging has
since entered into a plea agreement with the Attorney General of
Maryland for violations of the Health-Environment Article of the
Maryland Code.
®PEPCO argues that to avoid preemption of its PCB disposal
laws, a state must apply for and receive an exemption under 15
U.S.C. § 2617(b) ; and Maryland did neither.
l4a
fusal to abstain. Because we hold that abstention is ap-
propriate in this case, we do not address the merits of
PEPCO’s preemption claim.
The district court ruled in response to Maryland’s
motion to dismiss that abstention under Younger v.
Harris, 401 U.S. 37 (1971), was inappropriate. It ana-
lyzed the Younger doctrine and concluded that it did not
apply to state grand jury proceedings because there
was no adequate opportunity for PEPCO to raise its
federal claim of preemption before the grand jury. The
district court viewed the grand jury investigation as a
proceeding that was separate from the possible result-
ing criminal prosecution. It noted that since there was
no certainty of indictment, it was possible that PEPCO
would never be able to present the preemption claim in
state court. Further, the court reasoned that, even if
indicted, there was no indication of how long PEPCO
would have to wait for a state forum in which to present
its claim of federal preemption. We cannot agree with
the conclusion the district court reached from this rea-
soning.
Younger v. Harris set forth the established “national
policy forbidding federal courts to stay or enjoin pend-
- ing state court proceedings except under special circum-
stances.” 401 U.S. at 41 (footnote omitted). Specifically,
“a federal court should not enjoin a state criminal pros-
ecution begun prior to the institution of the federal suit
except in very unusual situations, where necessary to
prevent immediate irreparable injury.” Samuels v.
Mackell, 401 U.S. 66, 69 (1971). A companion case to
Younger, Samuels v. Mackell held that declaratory relief
should also be denied where an injunction would be im-
proper under Younger. Id. at 73. The Court, however,
recognized exceptions to abstention for prosecutions
brought in bad faith or for harassment purposes or in
other extraordinary circumstances. Younger v. Harris,
401 U.S. at 53.
15a
The Supreme Court has never addressed the issue of
whether Younger applies to state grand jury proceed-
ings. It has ruled, however, that the doctrine applies
to quasi-criminal proceedings such as nuisance actions,
Huffman v. Pursue, Ltd., 420 U.S. 592 (1975); to state
civil enforcement activ'ties such as the recovery of
fraudulently obtained welfare paymentsyTrainor v. Her-
nandez, 431 U.S. 484 (1977); child custody actions,
Moore v. Sims, 442 U.S. 415 (1979); and contempt pro-
ceedings, Juidice v. Vail, 480 U.S. 327 (1977); and to
state administrative proceedings in which important
state interests are involved and an adequate opportunity
exists to present federal or constitutional challenges to
the state action, Ohio Civil Rights Commission v. Dayton
Christian Schools, 54 U.S.L.W. 4860 (U.S. June 24,
1986) ; Middlesex County Ethics Committee v. Garden
State Bar Association, 457 U.S. 423 (1982); Gibson v.
Berryhill, 411 U.S. 564 (1973).
The fundamental principles underlying Younger and
its progeny of decisions are equity, comity and federal-
ism. A “basic doctrine of equity jurisprudence [is] that
courts of equity should not act, and particularly should
not act to restrain a criminal prosecution, when the mov-
ing party has an adequate remedy at law and will not
suffer irreparable injury if denied equitable relief.”
Younger, 401 U.S. at 43-44. The notion of comity is
one of federal courts having the “proper respect for
state functions,” which reinforces the policy of noninter-
ference in state criminal proceedings by courts of equity.
Id. at 44. Federalism represents
a system in which there is sensitivity to the legiti-
mate interests of both State and National Govern-
ments, and in which the National Government, anx-
ious though it may be to vindicate and protect fed-
eral rights and federal interests, always endeavors
to do so in ways that will not unduly interfere with
the legitimate activities of the States.
l6a
These principles encompass the belief that state courts
are as capable as federal courts of deciding federal or
constitutional issues; therefore, all state and federal
claims should be addressed in the pending state proceed-
ing. See Moore v. Sims, 442 U.S. at 320; Huffman v.
Pursue, Ltd., 420 U.S. at 611. See also Lynch v. Snepp,
472 F.2d 769, 774 (4th Cir. 1973}—(C“It-should never
be forgotten that the Constitution literally calls state
judges by name. . . and puts upon them the obligation
to apply the supreme Law of the Land.”).” These clas-
sic precepts, we think, apply to a state quasi-judicial ac-
tion taken within its grand jury system with as much
or more force as they apply to the state administrative,
civil, and quasi-criminal involved in in Dayton Christian
Schools, Moore v. Sims, Trainor v. Hernandez, and Huff-
man v. Pursue, Ltd.* A common thread to these de-
TWhile the Supreme Court has never analyzed the treatment
of a preemption claim in applying the Younger doctrine, it appears
to us that the same logic requiring abstention when there is a
constitutional challenge to a state criminal statute applies to liti-
gation where there is a claim of federal preemption due to a con-
gressional enactment. See Samuels v. Mackell, 401 U.S. 66 (1971)
(alternative claims of federal preemption and unconstitutionality
of state criminal anarchy law not distinguished). A state’s interest
in enforcing its criminal statutes remains undiminished until a
statute is declared unconstitutional. Likewise, its enforcement in-
terest remains undiminished until the statute is declared preempted
or invalid for any. other reason. It would strike us as anomalous
to hold that a state court may decide federal constitutional issues
but is unqualified or inhibited from deciding preemption issues.
8In Maryland, grand juries operate under the auspices of the
judicial branch. “Grand juries operate under the control of he
court which convenes them,” Duckett v. Touhey, 36 Md. App. 238,
242, 373 A.2d 328, 325 (1977), with the “single view that the
accused may be brought to trial in the court whereof the grand
jury is a part... .” Im re Report of Grand Jury, 152 Md. 616,
622, 187 A. 370, 372 (1927) (setting out detailed history of grand
juries as well as their function and purpose). Importantly, the
Supreme Court of the United States has stated that federal grand
17a
cisions is the requirement that the federal plaintiff have
an opportunity to present the federal claim in the state
proceedings.°®
The pivotal question then is whether PEPCO has an
adequate opportunity to present its preemption claim
within the state grand jury proceedings. The Supreme
Court has recently held in the context of state adminis-
trative proceedings that an adequate opportunity exists
when the federal plaintiff can present its claim on ju-
dicial review of the state administrative action or order.
In Middlesex County Ethics Committee v. Garden State
Bar A: :3ociation, the Court held that abstention was
proper where an attorney subject to disciplinary action
by the state ethics committee could present his constitu-
tional challenge to the action on review by the New
Jersey Supreme Court. 457 U.S. 423 (1982). In a case
jury proceedings are judicial in nature. In Cobbledick v. United
States, 309 U.S. 323 (1940), the Court stated:
The Constitution itself makes the grand jury a part of the
judicial process. It must initiate prosecution for the most
important federal crimes. It does so under general instructions
from the court to which it is attached and to which, from time
to time, it reports its findings. The proceeding before a grand
jury constitutes “a judicial inquiry” of the most ancient
lineage.
Id. at 327, quoting Hale v. Henkel, 201 US. 43, 66 (1906). See
Levine v. United States, 362 U.S. 610, 617 (1960) (“The grand
jury is an arm of the court and its in camera proceedings consti-
tute ‘a judicial inquiry.’ ”’).
®In contrast, the Supreme Court held Younger inapplicable in
two instances because the federal plaintiff could not present its
claim in the state proceedings. In Gibson v. Berryhill, 411 U.S.
564 (1973), the Court held that the inherent bias of the state
optometry board effectively denied an opportunity to present the
federal claim. In Gerstein v. Pugh, 420 U.S. 103 (1975), the
Supreme Court held that Younger did not bar a federal suit on the
legality of pretrial detention without a hearing to determine prob-
able cause because the claim could not be raised in defense at the
criminal trial. 7d. at 108 n.9.
18a
decided subsequent to.the district ¢court’s ruling in this
case, the Court stated, in response to a claim that the
Ohio Civil Rightg,Commission could not consider con-
stitutional claims, that “in any event, it is sufficient un-
der Middlesex, that constitutional claims may be raised
in state court judicial review of the administrative pro-
ceeding.” Ohio Civil Rights Commission v. Dayton Chris-
tian Schools, Inc., 54 U.S.L.W. at 4863. These cases dem-
enstrate that not only is the immediate proceeding rele-
vant in determining whether there is an opportunity to
present a federal claim, but subsequent state judicial
proceedings in which the claim can be raised are also
relevant. Grand jury investigation and indictment in-
itiate a criminal prosecution in Maryland’s system of
criminal enforcement. If indicted, PEPCO can present
its claim of federal preemption by TSCA-as a defense
to the criminal prosecution, and therefore has an ade-
quate opportunity to present the claim in the ongoing
proceedings.”
This court- has previously decided in another context
that the Younger doctrine applies to state-initiated grand
jury proceedings. See Craig v. Barney, 678 F.2d 1200
(4th Cir.), cert. denied, 459 U.S. 860 (1982). In Craig,
we dealt with the validity of a subpoena while here
PEPCO attacks the validity of the entire grand jury
process as it relates to its alleged environmental viola-
tions. We think nevertheless that the reasoning of Craig
governs our decision in this case and that Younger re-
quires abstention. The grand jury, although separate, is
1° Contrary to PEPCO’s contention, the fact that PEPCO can-
not present its claim immediately does not establish that it has no
adequate opportunity to present the preemption claim. In Moore v.
Sims, the Court addressed a similar argument concerning delay
in holding a requested hearing and ruled that the argument was
indistinguishable from “conventional claims of bad faith,” and the
Court could not “agree that the conduct_of the state authorities in
this case evinces bad faith.” 442 U.S. at 432. Here, there is not
even an allegation of bad faith.
19a
an integral part of state criminal enforcement proceed-
ings and here, as in Craig, PEPCO will have an ade-
quate opportunity to present its federal claim within that
ongoing state system. The district court, therefore,
should have abstained.
In view of our abstention ruling, we do not address
the merits of PEPCO’s preemption claim. On remand,
PEPCO’s action must be dismissed and its claims pur-
sued in Maryland courts. Gibson v. Berryhill, 411 U.S.
at 577. The judgment of the district court is, therefore,
reversed and remanded for proceedings consistent with
this opinion.
REVERSED AND REMANDED
20a
APPENDIX B
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MARYLAND
Case Number B86-220
POTOMAC ELECTRIC POWER COMPANY,
Plaintiff,
vs.
STEPHEN H. SACHS, et al.,
Defendants.
March 27, 1986
TRANSCRIPT OF RECORDED PROCEEDINGS
BEFORE THE HONORABLE WALTER E. BLACK, JR.
Appearances:
For the Plaintiff:
ARNOLD W. WEINER, ESQUIRE
36 South Charles Street
Baltimore, MD 21201
(301) 332-8500
For the Defendant:
RALPH §S. TYLER, ESQUIRE
Munsey Building
Seven N. Calvert Street
Baltimore, MD 21202
(301) 576-6342
2la
[2] THECOURT: Good afternoon.
THE CLERK: The matter now pending before the
Court is Civil Docket Number B86-220 for Potomac
Electric Power Company vs. Stephen H. Sachs, et al.
Counsels for the plaintiff are Arnold M. Weiner, E. Bar-
ret Prettyman, Jr. and David J. Hayes. Counsels for the
defendants are Michael C. Powell and Ralph 8. Tyler.
This matter now comes before the Court for a hearing
on motion of plaintiff for summary judgment.
THE COURT: I think at the outset, Counsel, let me
take care of my unfinished business, which is to render
an informal oral opinion on the matters raised in the
hearings two weeks ago, reserving the right, if it is
transcribed for any reason, to edit that opinion, without
in any way changing the results or the essential meaning.
This is declaratory judgment action brought by Po-
tomac Electric Power Company, referred to as PEPCO,
against the Attorney General of Maryland. PEPCO, who
is currently being investigated by the State Court Grand
Jury for possible violation of State environmental laws,
seeks to have the Federal Court declare that the Toxic
Substance Control Act, referred to as TOSCA, 15 U.S.C.,
Sections 2601 and following, preempts State law.
Of particular focus in this case is the regulation of
polychlorinated biphenyls, PCB’s, a highly toxic substance
[3] found in electrical transformers used by the plaintiff.
Pending before the Court is the defendant's motion to
dismiss the case, Paper Number 9. pygBuant to Rule 12
(D) (1) of the Federal Rules af Fe Procedure. The
defendants present three arguments why this Court lacks
subject matter jurisdiction over the case.
First, the plaintiff’s claims do not present a Federal
question. Second, no actual case or controversy exists
between the parties; and third, that the principles of
federalism and comity compel Federal Court abstention
under Younger v. Harris, 401 U.S. 37, 1971.
The parties have submitted memoranda in support of
their respective positions and the Court had the benefit
22a
of oral argument on Thursday, March 13, 1986. After
careful consideration of the arguments presented, the
Court has concluded that the motion must be denied for
reasons the Court will discuss. This Court does, in fact,
have subject matter jurisdiction over this action and
_ abstention is inappropriate.
First, it should be pointed out that the party asserting
jurisdiction has the burden of proof, see Thompson v.
Gaskill, 315 U.S. 442 at 446; 1942; Gibbs v. Buck, 307
U.S. 66 at 72, 19389; McNutt v. General Motors Accept-
ance Corporation, 298 U.S. 178 at 188 and 9, 1936; Hair
v. Family Publications Service, Inc., 342 F.Supp., 678 at
[4] 682, District of Maryland, 1972.
Now, the claim is based upon the Court’s Federal
question of jurisdiction. The plaintiff must prove the
claim is, in fact, based upon Federal Law and that the
claim is not frivolous, Wright and Miller Federal Prac-
tice and Procedure, Civil Section Number 1350 at 556
and Note 93, citing Baker v. Carr, 369 U.S. 186, 1962.
The Court is persuaded that the plaintiff has met its
burden with respect to all three of the issues raised by
the defendants. First as to the Federal question, under
28 United States Code, Section 1331, this Court has
original jurisdiction over any civil action arising under
the Constitution and Laws of the United States. The
courts traditionally have required that the Federal ques-
tion appear on the face of a well-pleaded complaint; and
not as an anticipated defense to the claim. Louisville
and Nashville Railroad Company v. Mottley, 211 U.S. 149,
1980. See generally Wright and Miller, Civil Section 3566.
PEPCO has, in fact, invoked Federal Law, TOSCA, on
the face of the complaint; and at first blush, that fact
alone would appear to satisfy the jurisdictional require-
ment. The defendants argue, however, that PEPCO’s
claim is, in fact, only a defense to a possible criminal
action the Attorney General may bring against it. That
such an anticipated defense is insufficient to satisfy the
[5] requirements of Federal question jurisdiction.
23a
While it is true that success on the part of the plain-
tiff in this declaratory judgment action could have the
effect of borrowing a State criminal prosecution, it does
not follow that Federal question jurisdiction is lacking
in this Court. Indeed, it appears that the plaintiff has
followed precisely the procedures mandated by the Su-
preme Court for bringing declaratory judgment actions
in Federal Court.
The hazy distinction between a Federal claim and an
anticipated Federal defense was recently addressed by
the Supreme Court in a series of cases decided in 1983
and 1985. In one, Franchise Tax Board v. Construction
Laborers’ Vacation Trust for Southern California, 463
U.S. 1, 1983, the Supreme Court held that the Federal
Court lacked jurisdiction to hear a case where the State
was the plaintiff in a State Court action, and claimed
that the State Law in question was not preempted by
Federal Law.
The defendants removed the case to Federal Court on
the basis that the preemption issue created Federal ques-
tion jurisdiction. The Supreme Court reversed, holding
that the Federal Court should look only at the State com-
plaint in determining whether Federal question jurisdic-
tion exists. The same day, the Supreme Court decided
Shaw v. Delta Airlines, 463 U.S. 85, 1988, and held that
where the plaintiffs in Federal Court sought injunctive
and declaratory [6] relief from State regulation, on
grounds of Federal preemption, a Federal question was
presented.
The distinction between the two cases is that in Fran-
chise Tax Board, it was the State that was attempting to
show that its laws were not preempted; in Shaw, the
Federal plaintiffs sought to prove that Federal Law pre-
empted the State Law being applied against them. In-
deed, Justice Blackmun, writing for the Court in Shaw
distinguished the cases on precisely these grounds by
citing Shaw, 463 U.S. at 986, Note 14, and the Court also
24a
refers to Wright and Miller, Section 3566 at Pages 99 to
101.
Clearly, PEPCO more closely resembles the plaintiffs in
Shaw than in Franchise Tax Board, a case upon which
the defendants heavily relied. Moreover, subsequent cases
from the Supreme Court further support the conclusion
that there is Federal question jurisdiction here. For
example, in Arcudi v. Stone and Webster Engineering
Corporation, 463 U.S. 1220, 1983, the Court summarily
affirmed the judgment of the Second Circuit in Stone and
Webster Engineering Corporation v. Ilsley, 690 F.2d,
$23, Second Circuit 1982, which had found that a Federal
preemption challenge to a State Statute was within the
Court’s Federal question jurisdiction.
The Supreme Court reaffirmed this principle in Law-
rence County vs. Lead Deadwood School District, 105
[7] S.Ct., 695, 1985, where the Court rejected the Eighth
Circuit’s conclusion that a Federal preemption challenge
to a State Statute did not state a Federal question. I’m
referring to Page 698, Note 6.
Moreover, in a case similar on its facts to this case,
the Fifth Circuit had little difficulty in finding Federal
question jurisdiction in a case where the plaintiff claimed
that TOSCA preempted State Law, Rollins Environmental
Service v. Parish «f St. James, 775 F.2d, 627 at 631,
Fifth Circuit, 1985.
The Court recognizes that there ~ some authority in
the Fourth Circuit that arguably supports the defend-
ant’s position, specifically in City National Bank v. Ed-
misten, 681 F.2d, 942, Fourth Circuit, 1982. The Court
vacated the declaratory judgment of the District Court
that certain banking procedures did not violate state
usury laws. The Court held that the claim did not arise
under Federal Law, because the complaint involved only
State Law. The case is clearly distinguishable on the
basis of the fact that the complaint did not involve Fed-
eral Law, whereas PEPCO’s complaint does.
25a
Moreover, the Edmisten decision came before the Su-
preme Court decision in Shaw, Stone and Webster, and
Lawrence County, and the Court is persuaded that any
ambiguity created by Edmisten is resolved by those later
[8] authorities.
Accordingly, the Court finds that by bringing a claim
that specifically invokes the preemption provision in Fed-
eral Statute, the plaintiff has met its burden of proving
Federal question jurisdiction. Indeed, where the very
question at issue is whether or not Congress intended
certain provisions of a Federal Statute to preempt State
Law, it seems both logical and legally correct that the
Federal District Court is the appropriate forum in which
to bring the case.
Second, as to the case or controversy. The defendants
assert that PEPCO has not alleged a case or controversy
within the meaning of Article III of the United States
Constitution. Specifically, the defendants argue that the
State’s investigation of PEPCO does not constitute an
actual controversy and that the threat of enforcement is
not sufficiently real to satisfy the requirements of Article
III. This assertion need not detain us long, particularly
in light of the defendant’s concession at oral argument,
that the threat of enforcement is now more acute than
at the time the Motion to Dismiss was filed.
This fact is reflected in the defendant’s reply brief,
‘where in addressing the abstention issue, the defendants
spelled out in detail how imminent a criminal prosecution
of PEPCO had become. Indeed, it is somewhat [9] in-
consistent to argue that the present investigation of
PEPCO is a pending State criminal proceeding for ab-
stention purposes, but is not a case or controversy under
Article III.
In Babbitt v. United Farm Workers National Union,
442 U.S. 289, 1979, the Supreme Court stated that a
case or controversy under Article III must embody a
dispute definite and concrete, not hypothetical or ab-
stract, being a quote from Page 298. The issue of how
26a
concrete a dispute must be in order to meet this test is
not entirely clear, but the Court is persuaded that the
dispute between PEPCO and the Maryland Regulatory
Agency is sufficiently immediate to meet the test. The
State has been rating PEPCO for several years and has
conducted a thorough investigation into the company’s
handling of transformers. There is nothing hypothetical
or abstract about the possibility of indictment in this
case.
Several lower court decisions support this conclusion.
For example, in Hughes v. Christophony, 486 F.Supp. 541,
District of Maryland, 1980, the owners of a restaurant
challenged an ordinance prohibiting topless dancing where
food or alcohol was served. The Court determined that
- where law enforcement authorities had made arrests on
enforcement visits, the threat of prosecution was suffi-
ciently real to provide the plaintiffs with standing to
bring the claim.
In addition, the Eighth Circuit addressed itself to [10]
the case or controversy’s requirement in the environ-
mental context in Caldwell v. Girley Refining Company,
755 F.2d 645, Eighth Circuit, 1985. In that case, Federal
agencies have asserted the plaintiffs liability for certain
hazardous waste spills, but had not initiated any prose-
cution. Caldwell sought declaratory relief and the Court
found that the threat of prosecution was sufficiently real
to satisfy the case or controversy requirement. A quote,
“a plaintiff need not always wait the actual commence-
ment in enforcement proceedings to challenge the au-
thority under which those proceedings would be brought”,
at Page 650.
The same reasoning applies here. The Court finds that
the disagreement between PEPCO and the State of Mary-
land has advanced close enough to the indictment stage
to satisfy the case or controversy requirement of Article
III.
Third, the Younger abstention. Finally, the defend-
ants assert that the Grand Jury Investigation of PEPCO
27a
constitutes ongoing State proceedings to which this Court
should defer under the doctrine of Younger v. Harris,
401 U.S. 87, 1971. While> the Younger decision itself
applied to a State criminal prosecution already in prog-
ress, the doctrine has been expanded to apply to civil and
administrative proceedings in certain contexts. See, for
example, Moore v. Sims, 442 U.S. 415, 1979; Hoffman v.
Pursue, Limited, 420 U.S. 592, 1975; Turner v. . Hernan
dez, 431 [11] US. 434, 1977.
In its most recent consideration of the scope of the
Younger doctrine, the Supreme Court listed three con-
sideratiéns Federal Court should evaluate in determin-
ing whether abstention is appropriat. in light of the
State proceedings.
First, there must be an ongoing State judicial proceed-
ing. Second, the proceedings must implicate important
State interest; and third, there must be an adequate
opportunity in the State proceedings to raise the Fed-
eral claims. Middlesex County Ethics Committee v. Gar-
den State Bar Association, 457 U.S. 423 at 432, 1982.
Of these three factors, it is clear that the third is the
most important for our purposes in this case. As the
Court indicated at oral argument, there is a surprising
dirth of case law on the issue of whether or not the
Younger doctrine applies to State Grand Jury proceed-
ings. The parties have brought to the Court’s attention,
however, severai cases where the issue was addressed,
though apparently not conclusively resolved.
In one, Craig v. Barney, 678 F.2d 1200, Fourth Cir-
cuit, cert. denied, 459 U.S. 860, 1982, the managers of
adult bookstores sought to enjoin Virginia Grand Jury
proceedings where no indictment had been filed, and
where the Grand Jury lacked the power to indict, the
Court found that [12] Younger abstention was appropri-
ate because of the matter of State Law, that Federal
plaintiffs would have an adequate opportunity to raise
their Federal claims in the State proceeding through
appropriate legal procedures, such as a contempt hearing.
28a
The Court went on to say, however, that “Federal
Court should not dismiss unless the State proceeding has
reached a stage that assures the Federal plaintiff an
opportunity to present its Constitutional defenses at
some point during the ongoing proceeding.” That’s a
quote from Page 1201.
In a case from another jurisdiction, Sovereign News
Company v. Falke, 448 F. Supp. 306, Northern District
of Ohio, 1977, the Court used similar language in de-
termining whether the Younger doctrine should apply to
State Grand Jury actions. In that case, the Federal
plaintiffs sought-to enjoin State Prosecutors from intro-
ducing into evidence before the Grand Jury certain ma-
terials allegedly seized in violation of the plaintiff’s
Fourth Amendment rights. The Court found that the
Younger abstention did apply, because in the context of
that case, the plaintiffs had an adequate opportunity to
raise their typical Federal claim.
The Court reasoned that the defendant would either
not be indicted by the Grand Jury, or could immediately
raise the Federal defense in a criminal prosecution. Re-
ferring to [13] page 359.
This Court cannot agree with that analysis in deter-
mining whether or not the Federal plaintiff has an ade-
quate opportunity to raise the Federal claim, this Court
must look not to what the proceedings might become,
but to what they are now. It is clear that PEPCO has
no present opportunity to raise its Federal concerns in
the Grand Jury proceedings. As noted in Middlesex and
also in Gibson v. Berryhill, 411 U.S. 546, 1978, if there
is no opportunity to raise the Federal issue in the State
proceedings, then the Younger abstention is inappropri-
ate.
Moreover, the Supreme Court has stated clearly that
where a State criminal case has not yet begun, that is,
an indictment has not yet been filed, considerations of
Federalism are not controlling. Steffel v. Thompson, 415
29a
U.S. 452, 1974, citing Perez v. Ledesma, 401 U.S. 82,
1971, are the concurring opinion of Justice Brennan.
This line of authority seems to run counter to the
lower court holdings in Craig and Sovereign News. The
Court is persuaded, however, that Steffel and Perez con-
trol this case, and that because the State Grand Jury
proceeding has not yet reached the stage where PEPCO
can raise its Federal claim, the Younger principle should
not apply.
The issue turns in part on whether one considers
State Grand Jury proceedings as a separate process or
as part [14] of a criminal case. The defendant correctly
points out that if PEPCO ever is indicted, it would then
be able to raise its Federal defense in State Court. How-
ever, that relief is inadequate to protect PEPCO’s as-
serted Federal rights at the present time, as noted in
Berryhill at Page 577.
The availability of a subsequent forum to raise the
Federal claim is an inadequate basis upon which to in-
voke Federal Court abstention. The Court is thus per-
suaded that State Grand Jury proceedings must be
viewed as separate from the actual criminal prosecu-
tion. There is no certainty that the Grand Jury will
actually return an indictment, nor is there any indica-
tion of how long PEPCO would have to wait™befere it
had its forum to raise the Federal defense.
Under such circumstances, it would be harsh, indeed,
to foreclose the opportunity to bring the preemption chal-
lenge to Federal Court prior to indictment. PEPCO has
no opportunity at all to raise its Federal claim in the
State Grand Jury proceedings, principles of abstention
under Younger, therefore, do not apply.
In conclusion, the Court finds that the defendants’ Mo-
tion to Dismiss must be denied. A Federal question is
presented on the face of the complaint, an actual con-
troversy exists between the parties sufficient to satisfy
the case or controversy requirement, and Federal Court
abstention under Younger v. Harris would be inappropri-
30a
ate on the facts of this [15] case. As a result, this Court
has jurisdiction to proceed in this case.
While the issues presented by the defendant, merited
serious consideration, the Court is entirely persuaded
that the Federal District Court is the appropriate forum
in which this claim should be heard. At issue is a Fed-
eral Statute containing an express preemption provision.
It seems far more efficient and fair to decide in this
forum the issue of what Congress intended, than to re-
quire the litigants to defend a criminal prosecution at
great length and then hope for Supreme Court review
on a fortiori. The plaintiff has a Federal claim and hav-
ing filed this declaratory action before any indictment
was filed in State Court, it has the right to have the
matter decided before this tribunal.
The motion is denied, and I have entered a formal
order consistent with this opinion. Bob, have Counsel
been furnished with a copy of the order?
te
8la
APPENDIX C
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Civil Action No. B-86-220
THE POTOMAC ELECTRIC POWER COMPANY
v.
STEPHEN H. SACHS, in his capacity as Attorney General
of Maryland, and ADELE WILZACK, in her capacity as
Secretary of the Maryland Department of Health and
Mental Hygiene
Filed: April 16, 1986.
Arnold M. Weiner, Michael Schatzow, Ethan L. Bauman,
and Melnicove, Kaufman, Weiner & Smouse, P.A., of
Baltimore, Maryland; E. Barrett Prettyman, Jr., Sher-
win J. Markman, John C. Keeney, Jr., David J. Hayes,
and Messrs. Hogan & Hartson, of Washington, D.C.; and
Kathleen B. DeWeese, Assistant General Counsel, of
Washington, D.C.: for plaintiff, The Potomac Electric
Power Company.
Stephen H. Sachs, Attorney General of Maryland, Michael
C. Powell, Richard M. Hall, Kathie A. Stein, Charles R.
Taylor, and Ralph 8. Tyler, Assistant Attorneys General
of Maryland: for defendants, Stephen H. Sachs, in his
capacity as Attorney General of Maryland, and Adele
Wilzack, in her capacity as Secretary of the Maryland
Department of Health and Mental Hygiene.
Black, District Judge.
This action for declaratory judgment presents the
Court with a narrow legal question of statutory interpre-
32a
tation. Does the federal Toxic Substances Control Act,
15 U.S.C. § 2601 et seg. (TOSCA), preempt Maryland’s
regulatory provisions governing the disposal of poly-
chlorinated biphenyls (PCBs) ?
The plaintiff, Potomac Flectric Power Company
(PEPCO) seeks to avoid a possible state criminal en-
forcement action by means of a declaratory judgment
that all state regulations relating to PCBs are preempted
by TOSCA. The defendants, Stephen H. Sachs, Attorney
General of Maryland, and Adele Wilzack, Secretary of
the Maryland Department of Health and Mental Hygiene,
argue that Maryland’s regulations governing disposal of
PCBs are not subject to preemption in light of the specific
exceptions in the preemption provision of TOSCA.
The matter is before the Court on the plaintiff’s Motion
for Summary Judgment.
I. BACKGROUND
Polychlorinated biphenyls are chemical substances which
have been manufactured and used commercially for
several decades. Due to their chemical stability, fire re-
sistance, and electrical resistance properties, they have
frequently been used in electrical transformers and ca-
pacitors. In the past, PEPCO used electrical transform-
ers containing this substance.
PCBs, however, are extremely toxic.
“Epidemiological data and experiments on laboratory
animals indicate that exposure to PCBs pose carci-
nogenic and other risks to humans. Experimental
animals developed tumors after eating diets that in-
cluded concentrations of PCBs as low as 100 parts
per million (ppm). Experiments on monkeys indi-
cate that diets with PCB concentrations of less than
ten ppm reduce fertility and cause still births and
birth defects. Other data show that PCBs may ad-
83a
versely affect enzyme production, thereby interfer-
ing with the treatment of diseases in humans.”
Environmental Defense Fund v. Environmental Pro-
tection Agency, 636 F.2d 1267, 1270 (D.C. Cir.
1980). =
Moreover, PCBs accumulate in fish and other aquatic
organisms and are virtually indestructible in the environ-
ment. Affidavit, of Ronald Nelson, attached to Defend-
ants’ Memorandum in support of Motion to Dismiss, at 2.
Both Congress and the state of Maryland have re-
sponded to the grave dangers presented by PCBs. At the
federal level, Congress passed TOSCA, which allows the
administrator of the Environmental Protection Agency
(EPA) to regulate virtually all aspects of PCB manu-
facture, use and disposal. See 15 U.S.C. § 2605(e) (pro-
viding a separate erg 0 PCBs). Indeed, the legis-
lative history of TOSCA iftdicates that PCBs were a
special source of concern to Congress at the time of the
passage of the statute. See comments of Representative
Dingell, explaining Congress’ attention to the immediate
dangers posed by PCBs, Defendants’ Opposition to plain-
tiff’s Motion for Summary Judgment at 21. At the state
level, Maryland regulates PCBs as a hazardous waste
under the state’s waste management program. By track-
ing PCBs from “cradle to grave,” the state can detect
and respond to PCB problems, incidents and spills in the
state. Nelson Affidavit, supra, at 3. =
The present controversy arises out of PCB contamina-
tion discovered at a Beltsville, Maryland site used by the
United Rigging and Hauling Company (United Rigging)
as a salvage yard for electrical transformers. State au-
thorities discovered PCB concentrations in the soil as
high as 128,000 parts per million and found that con-
taminated runoff was entering a nearby creek. Pursuant
to their authority under the Comprehensive Environ-
mental Response, Compensation, and Liability Act of
34a
1980 (CERCLA or Superfund), 42 U.S.C. § 9601 et seq.,
state and federal authorities determined that the situa-
tion at the United Rigging site posed an imminent and
substantial endangerment to public health, welfare, or
the environment. PEPCO, whose transformers were
found at the site, along with United Rigging, entered into
an administrative consent order with state authorities
and the EPA to conduct the Superfund cleanup. The
cleanup activities resulted in the removal of 10,562 tons
of PCB-contaminated soil and 787 electrical transformers.
Nelson Affidavit, supra, at 5.
In May, 1985, a Prince George’s County grand jury
began a criminal investigation of the contamination at
the United Rigging site. PEPCO has been one of the
subjects of that investigation, which has not yet led to
any indictments. There is little question from the record,
however, that an indictment of PEPCO for alleged re-
sponsibility for or participation in the United Rigging
contamination is imminent. See Defendant’s Reply Mem-
orandum in support of Motion to Dismiss at 11-13 n.10
(providing details of the intention of the Attorney Gen-
eral’s Office to prosecute) .
PEPCO brought this suit in federal court in an ap-
parent attempt to foreclose the possibility of a state
criminal prosecution. Its argument, in sum, is that
TOSCA expressly preempts any state efforts to regulate
PCBs, including disposal, and that the state therefore
lacks the authority to regulate the substances or to indict
a party for mishandling them.
The Court has previously denied the defendants’ Mo-
tion to Dismiss, or for Summary Judgment, Based Upon
Lack of Jurisdiction, or for Stay. The Court found that
»PEPCO’s complaint established federal question jurisdic-
tion under Shaw v. Delta Air Lines, 463 U.S. 85, 96 n.14
(1983), that the facts presented a live case or contro-
versy, and that federal court abstention under Younger
35a
v. Harris, 401 U.S. 37 (1971), was inappropriate.* Ac-
cordingly, the parties proceeded to the merits of the
plaintiff’s Motion for Summary Judgment, which was
fully briefed and presented at oral argument on March
27, 1986.
After full consideration of the arguments presented,
the Court is persuaded that the plaintiff’s motion must
be denied and declaratory judgment entered in favor of
the defendants. As discussed below, the matter is ripe for
adjudication on summary judgment, and the Court has
determined that the Maryland regulations governing dis-
posal of PCBs are not preempted by TOSCA.
II. SUMMARY JUDGMENT
Under Rule 56 of the Federal Rules of Civil Proce-
dure, a motion for summary judgment can only be
granted if there is no genuine issue as to any material
fact and the moving party is entitled to judgment as a
matter of law. Poller v. Columbia Broadcasting System,
Inc., 368 U.S. 464, 467 (1962). The burden is on the
moving party to demonstrate clearly that there is no
genuine issue of fact and any doubt as to the existence
of such an issue is resolved against him. Phoenix Sav-
ings & Loan, Inc. v. Aetna Casualty & Surety Co., 381
F.2d 245, 249 (4th Cir. 1967). This burden can be a
heavy one; the-standard for passing on motions for sum-
mary judgment is strict. Clarke v. Montgomery Ward
& Co., 298 F.2d 346, 348 (4th Cir. 1962). If interpre-
tations of the facts of a case differ, summary judgment
is improper. Morrison v. Nissan Motor Co., Ltd., 601
1 At oral argument on the motion for summary judgment, the
defendants moved to file an immediate appeal of this Court’s ruling
on these issues, pursuant to 28 U.S.C. § 1292(b). In light of the
dispositive ruling of this opinion, that motion will be denied as
moot, and the parties will be free to argue the jurisdictional issues,
as well as the merits, on appeal.
36a
F.2d 139, 141 (4th Cir. 1979). See also Ross v. Com-
munications Satellite Corp., 759 F.2d 355, 364 (4th Cir.
1985), where the court determined that summary judg-
ment is proper only when “it is perfectly clear that there
are no [factual] issues in the case.”
The Court has determined that the narrow legal issues
presented by this case are ripe for determination on
summary judgment. The primary task before the Court
is to determine the intent of Congress when it enacted
the preemption provision of TOCSA. None of the facts
related to Congress’ activities are in dispute. While the
parties clearly interpret the legislative history quite dif-
ferently, the record is complete, and proceeding to trial
would do nothing to further illuminate what Congress
intended. There are obviously substantial issues of fact
relating to the actions which created the contamination
at the United Rigging site, but those issues are not be-
fore the Court. Rather, the focus of this Court’s atten-
tion is solely on the preemption provision of TOSCA,
15 U.S.C. § 2617, and the exceptions contained in it. On
those issues, there is no dispute of fact.2 Moreover, as
one court has stated, “[q]uestions of statutory construc-
tion and legislative history traditionally present legal
questions properly resolved by summary judgment.”
Union Pacific Land Resources Corp. v. Moench Invest-
ment Co., 696 F.2d 88, 93 n.5 (10th Cir. 1982), cert.
denied, 460 U.S. 1085 (1983).
2A possible exception—where a dispute of fact might exist—is
in the arguments related to the identity or lack of identity between
the Maryland regulations and the federal regulations under the
first of the three listed exceptions in § 2617, § 2617(a) (2) (B) (i).
If the Court were to rule on that issue, more facts would be needed,
in order to examine the regulations item by item. The Court, how-
ever, does not reach that issue, having concluded that the State
must prevail on a separate dispositive issue. The factual issues
of the identity of the regulations, therefore, are not in any sense
material to the Court’s ruling.
37a
III. PREEMPTION UNDER TOSCA
“Tt is well-established that within constitutional limits
Congress may preempt state authority by so stating in
express terms.” Pacific Gas & Electric v. State Energy
Resources Conservation & Development Commission, 461
U.S. 190, 203 (1983), citing Jones v. Rath Packing Co.,
430 U.S. 519, 525 (1977). In the absence of an express
preemption provision, Congress’ intent to preempt state
law may be found from a pervasive scheme of federal
regulation that leaves the states no room to supplement
the federal requirements or from a regulatory scheme
in which the federal interest is dominant. Even where
Congress does not entirely displace state regulation, state
law is preempted to the extent that it conflicts with fed-
eral law or stands as an obstacle to the accomplishment
of the purposes and objectives of Congress. Pacific Gas
& Electric, 461 U.S. at 203-04. It should be noted, how-
ever, that in certain areas traditionally left to the his-
toric police powers of the State, preemption will be
found only if the clear and manifest purpose of Congress
is to preempt. Jones v. Rath Packing, 430 U.S. at 525;
Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230
(1947).
In TOSCA, Congress was explicit in addressing the
preemption issue by including § 2617. It determined that
federal regulations under TOSCA should preempt certain
areas of state regulation, but not in situations specifi-
cally excepted in the statute. In effect, by including the
exceptions to preemption, Congress left the states a lim-
ited role to play in the regulation of toxic substances.
The only issue presented here is whether Maryland’s
PCB disposal regulations come within any of those ex-
ceptions.
The preemption section of TOSCA provides in perti-
nent part as follows:
i la aia
38a
§ 2617. Preemption
(a) Effect on State Law. (1) Except as provided
in paragraph (2), nothing in this chapter shall affect
the authority of any State or political subdivision
of a State to establish or continue in effect regula-
tion of any chemical substance, mixture, or article
containing a chemical substance or mixture.
(2) Except as provided in subsection (b) of this
section——
* * *
(B) if the Administrator prescribes a rule or order
under section 2604 or 2605 of this title (other than
a rule imposing a requirement described in subsec-
tion (a) (6) of section 2605 of this title) which is
applicable to a chemical substance or mixture, and
which is designed to protect against a risk of injury
to health or the environment associated with such
substance or mixture, no State or political subdi-
vision of a State may, after the effective date of
such requirement, establish or continue in effect, any
requirement which is applicable to such substance
or mixture, or an article containing such substance
or mixture, and which is designed to protect against
such risk unless such requirement (i) is identical
to the requirement prescribed by the Administra-
tor, (ii) is adopted under the authority of the Clean
Air Act or any other Federal law, or (iii) prohibits
the use e* such substance or mixture in such State
or politicai subdivision (other than its use in the
manufacture or processing of other substances or
mixtures).
The statutory scheme starts with the premise that no
state regulation is preempted until the Administrator
promulgates a rule governing that substance. Then, once
the Administrator promulgates such a rule, state law
is preempted unless it comes within the exceptions listed
39a
in the statute, of which there are four. The first is con-
tained in the parenthetical clause stating “(other than
a rule imposing a requirement described in subsection
(a) (6) of section 2605 of this title)”; the remaining
three are listed at the end of § 2617(a) (2) (B).
As explained below, the Court finds that the Maryland
rules governing disposal of PCBs fall within the paren-
thetical exception and are therefore not preempted by the
federal disposal regulations. It is therefore unneces-
sary to reach the issues presented by the remaining three
exceptions.
IV. THE PARENTHETICAL EXCEPTION OF
§ 2617 (a) (2) (B)
A. The Statutory Language.
The defendants and amici* argue that the plain lan-
guage of the statute shows that the parenthetical excep-
tion contained in § 2617(a) (2) (B) is applicable to PCB
disposal regulations, which are therefore not preempted.
PEPCO argues that because of the fact that PCBs are
treated in a separate provision of the statute (§ 2505
(e)), all state PCB regulations—including those relating
to disposal—are preempted. Because of the obvious im-
portance of this issue and the conflict in the relevant
judicial opinions, the question must be addressed in some
detail.
3 The Court has accepted amicus briefs from the United States
(on behalf of the EPA), the attorneys general of eight states
(New York, California, Alabama, Ohio, Maine, Minnesota, Rhode
Island, and Vermont), and the Chesapeake Bay Foundation. Al-
though their arguments are not identical, all three groups argue
strongly that Maryland’s PCB disposal regulations are not pre-
empted by § 2617 of TOSCA. The Court finds the EPA position
to be of particular significance, in light of the fact that the EPA
is the federal regulatory body whose preemptive authority is at
issue in the case.
arene
40a
Section 2617(a) (2) (B) provides that if the EPA Ad-
ministrator prescribes a rule or order under § 2604 or
§ 2605 applicable to a criminal substance or mixture,
designed to protect against a risk of injury to health or
environment, then state regulations governing that sub-
stance are preempted. There is no question that PCBs
are in fact a chemical substance or mixture that pre
sents an “unreasonable risk of injury to health or the
environment” under § 2605(a) and that the Administra-
tor has in fact prescribed rules governing PCBs. See 43
Fed. Reg. 7150 (1978), codified at 40 C.F.R. Part 761.
The parenthetical exception, however, removes a cer-
tain class of state regulations from the preemptive ef-
fect of § 2617(a) (2)(B). Specifically, the Administra-
tor’s rules imposing a requirement described in § 2605
(a) (6) (governing manner or method of disposal of toxic
substances) do not preempt state regulations. The result
is that states remain free to impose certain regulatory
burdens on the disposal of toxic substances. See, e.9.,
Warren County v. State of North Carolina, 528 F. Supp.
276, 289 (E.D. N.C. 1981) (Congress intended to give
states and localities some leeway to impose more stringent
disposal requirements than those provided for by federal
regulation ).
PEPCO argues that because federal PCB regulations
were promulgated under § 2605(e) and not under § 2605
(a) of TOSCA, regulations cannot be considered as a
rule imposing a requirement described in § 2605(a) (6).
In e.fect, PEPCO is asserting that PCR disposal regula-
tions are to be treated differently than disposal regula-
tions of all other toxic substances regulated by the Ad-
ministrator.
Plaintiff’s assertion is irreconcilable with the plain
language of the statute and would require a finding that
the words “described in” have the same meaning as
“promulgated under.” The Court is unwilling to reach
such a conclusion. In construing statutory language,
4la
courts must interpret the words according to their plain
meaning. Bouie v. City of Columbia, 378 U.S. 347, 362-
63 (1964). The two phrases have entirely different
meanings, and it is logical to conclude that the regula-
tion of a substance can be promulgated under a separate
provision of the statute but can nonetheless prescribe dis-
posal requirements described in § 2605(a) (6). The words
“described in” allow for a broader scope than the sub-
stances regulated under § 2605(a); they govern any
requirement describing a disposal regulation.
By definition, then, any PCB disposal regulations prom-
ulgated under § 2605(e) are regulations imposing re-
quirements described in § 2605(a) (6). See SED, Inc. v.
City of Dayton, 519 F. Supp. 979, 987 (S.D. Ohio 1981)
(the § 2605(e) rules do “impose a requirement described
in subsection (a) (6) of § 2605,” i.e., disposal restrictions
and prohibitions. The parenthetical in no sense requires
that nonpreemptive federal regulations actually be en-
acted under § 2605(a)(6)). (emphasis in original) See
also Chappell v. SCA Services, Inc., 540 F. Supp. 1087,
1098 (C.D. Ill. 1982) (deferring to EPA position that
“state requirements regarding disposal of PCBs are
completely exempt from federal preemption . . .”).
There is a clear explanation for Congress’ having
treated PCBs differently from all other toxic substances
to be regulated by the Administrator. At the time of the
passage of TOSCA, PCBs were already known to be ex-
tremely toxic, and Congress wanted to express a sense of
urgency and a need for immediate regulation. As Sena-
tor Nelson stated, “{i]t is preferable not to enact legis-
lation on a substance-by-substance basis, but rather gen-
erally, as the Toxic Substances bill proposes to do. How-
ever, the PCB problem shows no sign of abating and it
has become so severe that it is necessary to address the
problem head on... .” See United States brief at 11
n.15.
———_™”----
7 42a
In effect, what Congress did by singling out PCBs as a
toxic substance to be regulated, was to make the § 2605
(a) determination for the Administrator that PCBs
present an unreasonable risk of injury to health or the
environment. Dow Chemical Co. v. Costle, 484 F. Supp.
101, 102 n.1 (D. Del. 1980). That was the practical ef-
fect of Congress’ inclusion of the separate provision for
PCBs. Contrary to the assertions of PEPCO, there is
nothing in the legislative history of TOSCA to indicate
that Congress intended that PCB disposal should be treat-
ed differently with respect to preemption than any other
substance.*
The only fair reading of the statutory language of
§ 2617 compels one to the conclusion that federal PCB
disposal regulations do not preempt state PCB disposal
requirements. As the defendant acknowledged at oral ar-
gument, there is, of course, an “outer limit” to such a con-
clusion, ¢.g., a state could not impose disposal require-
ments that frustrated the federal plan or violated the
Commerce Clause. Accord Chappell, 540 F. Supp. at 1098
(state PCB disposal regulations not preempted if not less
restrictive than the federal regulations). This case, how-
ever, does not present the Court with any such outer
limits; rather, Maryland’s disposal regulations’ supple-
*PEPCO indicated at oral argument that there is language in
some of the legislative history that indicates Congress was consider-
ing full preemption of state PCB regulations. That language is not
at all conclusive, however, and must be read within the context of
the entire Congressional debate. That context shows that Congress
recognized the inherent interest of the States and political sub-
divisions respecting disposal of hazardous chemicals within their
jurisdiction. United States brief at 16, quoting from the House
Report on TOSCA.
* There is some @ispute as to whether the term “disposal” in-
cludes just spillage and removal! or also storage for disposal. The
Court finds that the term “disposal” includes storage for disposal as
well as both spillage and removal. Nothwithstanding its previous
___—
43a
ment existing federal disposal requirements and do not
appear in any way to frustrate the overall federal plan.
That result was fully within the contemplation of Con-
gress.
B. Applicable Case Law.
A number of judicial opinions have addressed the issue
of whether state PCB disposal requirements are pre-
empted by TOSCA, and there is unfortunately a consid-
erable degree of inconsistency in their conclusions. The
Court is persuaded, however, taat the opinions which ac-
tually examined the statutory language and legislative
history support the defendants’ position that the state
disposal requirements are not preempted.
For example, in SED, 519 F. Supp. 979, the plaintiffs
sought declaratory relief in challenging city ordinances
that regulated, restricted, or prohibited storage of PCBs.
The Court correctly reasoned that PCB disposal require-
ments impose a requirement “described in” § 2605(a) (6).
Id. at 987. It went on to conclude, however (erroneously,
in this Court’s opinion), that the structure of the statu-
tory language nonetheless showed that Congress did not
intend state PCB disposal regulations to survive under
the parenthetical exception. As the United States points
out in its brief at 20-21, the court in SED was correct
in its first conclusion that the disposal regulations under
§ 2605(e) were “described in” § 2605(a) (6), but incor-
position to the contrary, the EPA considers that state regulations
governing storage for disposal as well as actual disposal are free
from preemption. See letter of EPA General Counsel A. James
Barnes to defendant Sachs, Exhibit F, attached to Memorandum of
Points and Authorities in Support of Plaintiff's Motion for Sum-
mary Judgment.
That view is entitled to “considerable deference” from the Court.
Chemical Manufacturers Association v. Natural Resources De-
fense Council, —— U.S. ——, 105 S.Ct. 1102, 1108 (1985).
44a
rect in its second conclusion that the parenthetical ex- -
ception alone would not save the city’s ordinance.*
In Chappell, 540 F. Supp. 1087, the plaintiffs brought
a class action suit to recover damages for nuisance from
the operator of a hazardous waste landfill. The court re-
viewed the statutory language of TOSCA and found that
it was “reasonable to conclude that state laws relating to
disposal of chemical substances are not preempted by the
TSCA.” Id. at 1098. (emphasis in original). The Chap-
pell court read the language of § 2617(a)(2)(B) in
conjunction with § 2605(a)(6)(B)* and agreed with the
EPA’s position that state PCB disposal regulations are
not preempted. That reasoning is consistent with the
Congressional intent behind TOSCA. As Representative
Broyhill pointed out, “there is nothing in this act that
affects the right of States to act in their authority over
disposal of hazardous properties or hazardous chemi-
cals... .” Chesapeake Bay Foundation brief at 14.
In Twitty v. North Carolina, 527 F. Supp. 778 (E.D.
N.C. 1981), aff'd without opinion, 696 F.2d 992 (4th
Cir. 1982), a case upon which PEPCO relies, the owners
of land adjacent to property designated as a hazardous
waste landfill sought to enjoin the use of the land for
that purpose. Among the five causes of action listed was
* Ultimately, the court in SED concluded that the City’s ordinance
was valid under the “other federal law” exception of § 2617. This
Court expresses no views on that issue, concluding that the paren-
thetical exception alone permits Maryland to regulate PCB disposal.
tT Section 2605(a)(6)(B) provides in pertinent part that a dis-
posal requirement issued by EPA “may not require any person to
take any action which would be in violation of any law or require-
ment of, or in effect for, a state or political subdivision ....” The
court in Chappell seemed to be recognizing that if this provision
were to have any meaning at all, state disposal laws must remain in
effect. As the Chesapeake Bay Foundation states, § 2605(a) (6) (B)
“is premised on an assumption that state regulations on hazardous
waste disposal will remain valid ....” Chesapeake Bay Foundation
brief at 11. That reasoning seems entirely correct.
45a
one that the disposal of toxic waste, including PCBs,
would violate a local county ordinance. In summary fash-
ion, the district court rejected the argument, saying only
that TOSCA preempts “any local ordinances.” Id. at 781.
The district court opinion in Twitty must, however, be
read in conjunction with Warren County v. State of
North Carolina, 528 F. Supp. 276 (E.D. N.C. 1981), the
companion case to Twitty, involving the same hazardous
waste landfill. In Warren County, the court struck down
a county ordinance that flatly prohibited the disposal of
PCBs in the county as violative of the federal regulatory
scheme envisioned by TOSCA. The court noted, however,
that Congress intended to give states and localities some
leeway to impose more stringent disposal requirements
than those provided for by federal regulation. Jd. at 289.
Only an outright ban would be prohibited. That state-
ment clearly limits the broad, summary language in
Twitty which PEPCO invokes.
PEPCO places much reliance on a Fifth Circuit case,
Rollins Environmental Services (FS), Inc. v. Parish of
St. James, 775 F.2d 627 (5th Cir. 1985). The plaintiff,
a toxic waste disposal firm, brought suit against a local
parish, challenging the legality of an ordinance whereby
the parish had prohibited toxic waste disposal, including
disposal of PCBs. The court found that the parish’s or-
dinance was preempted by TOSCA but devoted most of
its analysis to the question of whether the prohibition
against “commercial solvent cleaning businegses’” was in
fact a sham for a prohibition against the disposal of
PCBs. Ultimately the court did conclude that the ordi-
nance was indeed a sham and that an outright prohibi-
tion on PCB disposal would frustrate the scheme of
TOSCA for the handling of PCBs.
It was only in a footnote that the court addressed the
issue of the applicability of the parenthetical exception.
Reasoning that the EPA’s PCB rules were promulgated
under § 2605(e), not § 2605(a), the court concluded—
46a
without any analysis of the statutory language or legis-
lative history—that the parenthetical exception did not
apply. Jd. at 634 n.7. The Court does not regard this
analysis as controlling.
The other cases relied upon by PEPCO contain similar
analytical flaws. For example, in Chemical Waste Man-
agement, Inc. v. Broadwater, Civil Action No. 84-G-
1208-W (N.D. Ala. 1984) (Exhibit C, attached to Mem-
orandum of Points and Authorities in Support of Motion
for Summary Judgment), appeal dismissed as moot, 758
F.2d 1588 (11th Cir. 1985), the plaintiff, a waste man-
agement company, sought preliminary injunctive relief
from an order of a state environmental agency, on
grounds of federal preemption under TOSCA. The order
would have had the effect of closing a substantial por-
tion of the operations of the hazardous waste treatment,
storage, and disposal facility operated by the plaintiff.
The court granted the preliminary injunction, finding
that Congress’ inclusion of a separate provision for
PCBs rendered the parenthetical exception inapplicable.
The court, hewever, did not evaluate the significance of
the phrase “described in” and simply assumed that Con-
gress meant to preempt PCB disposal, in addition to the
other aspects of PCB handling.
Similarly, in City of Middletown v. Hartford Electric
Light Co., Civil Action No. 33133 (Conn. 1981) (Exhibit
D, attached to plaintiff’s memorandum in support of mo-
tion for summary judgment), the court did not examine
the issue in depth. In Middletown, the defendant utility
company operated a high efficiency boiler and proposed to
burn 30,000 gallons of PCB contaminated oil at the fa-
cility. The city sought injunctive relief in state court
for alleged violations of the local zoning ordinances. The
court determined that the parenthetical exception did not
apply, because PCB regulations under TOSCA were
promulgated under § 2605(e) and not § 2605(a) (6).
Recognizing that “regulation of PCB disposal might ap-
47a
pear to be authorized under Sec. 2605(a) (6),” the Mid-
dletown court reasoned that such a conclusion would ren-
der § 2605(e) (1) (A) (which requires the Administrator
to promulgate PCB disposal rules) a nullity. Jd. at 25.
That reasoning simply ignores the Congressional in-
tent to allow states some freedom to regulate the disposal
of PCBs as well as other toxic chemicals. See Warren,
528 F. Supp. at 289. As in Rollins and Chemical Waste
Management, the court in Middletown failed to ade-
quately analyze the actual language of the statute—spe-
cifically, the words “described in,”—and took no note of
the legislative history of the statute.
A contrary conclusion would produce the anomalous "
result of prohibiting any state disposal regulation of the
one substance that Congress found so toxic and danger-
ous that it required special attention in the statute. Con-
gress recognized that the states should retain some con-
trol, under their respective police powers, to regulate
disposal of toxic hazards posing a threat to the health
and safety of their citizens. That is the very purpose of
the parenthetical exception in § 2617(a) (2) (B). It turns
Congressional intent on its head to argue that Congress
would identify a substance as particularly toxic and at
the same time emasculate all state efforts to regulate its
disposal within state borders. Congress did intend to
preempt certain activities related to PCBs, such as manu-
facture and transportation. With respect to disposal,
however, Congress intended a result that would allow for
both the states and the federal agencies to regulate the
disposal of toxic substances in a cooperative effort.
V. CONCLUSION
Maryland’s PCB disposal regulations are not preempted
by § 2617 of TOSCA. Since Congress has determined
that PCBs represent an unreasonable risk of injury to
health or the environment, federal PCB disposal regula-
tions are therefore “described in” § 2605(a) (6). Accord-
ae arene
48a
ingly, the parenthetical exception contained in § 2617
(a) (2) (B) applies, removing the preemptive effect of
federal regulation over state disposal requirements. The
states remain free to regulate the disposal of PCBs in a
manner that ultimately does not frustrate the purpose
of the federal goal of reducing the dangers from toxic
substances.
Having determined that the resolution of the paren-
thetical exception issue conclusively answers the question
presented in this case, the Court does not reach the three
other exceptions in § 2617 which might provide addi-
tional bases upon which the State could argue that its
disposal regulations are not preempted.
There are no outstanding issues of material fact with
respect to this dispositive issue in this litigation. Not-
withstanding the fact that the defendants have urged the
Court to proceed to trial and have not filed any cross-
motion for summary judgment, the Court finds that the
defendants are entitled to judgment as a matter of law.
Further proceedings on the merits would be pointless.
The Court therefore denies the plaintiff’s motion for
sumamry judgment and will enter an appropriate de-
claartory judgment order, consistent with this opinion.
Dated: April 16, 1986
<<
/s/ Walter E. Black, Jr.
WALTER E. BLACK, JR.
United States District Judge
49a
APPENDIX D
JUDGMENT
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 86-1573
THE POTOMAC ELECTRIC POWER COMPANY,
Appellee,
versus
STEPHEN H. SACHS in his capacity as Attorney General
of Maryland; ADELE WILZACK, in her capacity as
Secretary of the Maryland Department of Health and
Mental Hygiene,
- Appellants,
STATE OF NEW YORK,
Amicus Curiae,
STATE OF ALABAMA,
Amicus Curiae,
NIAGARA MOHAWK POWER CORPORATION,
Amicus Curiae,
EDISON ELECTRIC INSTITUTE,
Amicus Curiae,
NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION,
Amicus Curiae,
AMERICAN PUBLIC POWER ASSOCIATION,
Amicus Curiae,
AMERICAN ELECTRIC POWER SERVICE CORPORATION,
Amicus Curiae,
APPALACHIAN POWER COMPANY,
Amicus Curiae,
50a
CoLUMBUS & SOUTHERN OHIO ELECTRIC COMPANY,
Amicus Curiae,
INDIANA & MICHIGAN ELECTRIC COMPANY,
Amicus Curiae,
OHIO POWER COMPANY,
Amicus Curiae,
ATLANTIC CITY ELECTRIC COMPANY,
Amicus Curiae,
‘ BALTIMORE GAS & ELECTRIC COMPANY,
Amicus Curiae,
CENTRAL HUDSON GAS & ELECTRIC CORPORATION,
Amicus Curiae,
CENTRAL ILLINOIS LIGHT COMPANY,
Amicus Curiae,
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY,
Amicus Curiae,
CENTRAL & SOUTH WEST SERVICES,
Amicus Curiae,
CINCINNATI GAS & ELECTRIC COMPANY,
Amicus Curiae,
COMMONWEALTH EDISON COMPANY,
Amicus Curiae,
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.,
Amicus Curiae,
DAYTON POWER & LIGHT COMPANY,
Amicus Curiae;
DELMARVA POWER & LIGHT COMPANY,
Amicus Curiae,
DUKE POWER COMPANY,
Amicus Curiae,
DUQUESNE LIGHT COMPANY
Amicus Curiae,
5la
FLORIDA POWER & LIGHT COMPANY,
Amicus Curiae,
HOUSTON LIGHTING & POWER COMPANY,
Amicus Curiae,
ILLINOIS POWER COMPANY,
Amicus Curiae.
INDIANAPOLIS POWER & LIGHT COMPANY.
Amicus Curiae.
IowA POWER & LIGHT COMPANY,
Amicus Cudiae
IOWA PUBLIC SERVICE COMPANY.
Amicus Curiae
JERSEY CENTRAL POWER & LIGHT COMPANY.
Amicus Curie.
MADISON GAS & ELECTRIC COMPANY,
Amicus Curiae.
MINNESOTA POWER & LIGHT COMPANY,
Amicus Curiae,
MONOGAHELA POWER COMPANY,
Amicus Curiae,
MONTAUP ELECTRIC COMPANY,
Amicus Curiae,
NEW ENGLAND POWER COMPANY,
Amicus Curiae,
NEW YORK STATE ELECTRIC & GAS CORPORATION,
Amicus Curiae,
OHIO VALLEY ELECTRIC CORPORATION,
Amicus Curiae,
OKLAHOMA GAS & ELECTRIC COMPANY,
’ Amicus Curiae,
PACIFIC GAS & ELECTRIC COMPANY,
Amicus Curiae,
52a
PACIFIC POWER & LIGHT COMPANY,
Amicus Curiae,
PENNSYLVANIA POWER & LIGHT COMPANY,
Amicus Curiae,
PHILADELPHIA ELECTRIC COMPANY,
Amicus Curiae,
PUBLIC SERVICE ELECTRIC & GAS COMPANY,
Amicus Curiae,
PUBLIC SERVICE COMPANY OF INDIANA, INC.,
Amicus Curiae,
SOUTHERN CALIFORNIA EDISON COMPANY,
Amicus Curiae,
SOUTHERN COMPANY SERVICES, INC.,
Amicus Curiae,
ALABAMA POWER COMPANY,
‘ Amicus Curiae,
GEORGIA POWER COMPANY,
Amicus Curiae,
GULF POWER COMPANY,
Amicus Curiae,
MISSISSIPPI POWER COMPANY,
Amicus Curiae,
TAMPA ELECTRIC COMPANY,
Amicus Curiae,
TEXAS UTILITIES GENERATING COMPANY,
Amicus Curiae,
CLEVELAND ELECTRIC ILLUMINATING COMPANY,
Amicus Curiae.
DETROIT EDISON COMPANY,
Amicus Curiae,
POTOMAC EDISON COMPANY,
Amicus Curiae,
58a
TOLEDO EDISON COMPANY,
Amicus Curiae,
UNION ELECTRIC COMPANY,
Amicus Curiae,
VIRGINIA ELECTRIC POWER COMPANY,
Amicus Curiae,
WEST PENN POWER COMPANY,
Amicus Curiae,
WISCONSIN ELECTRIC POWER COMPANY,
Amicus Curiae,
WISCONSIN POWER & LIGHT COMPANY,
Amicus Curiae,
WISCONSIN PUBLIC SERVICE CORPORATION,
Amicus Curiae,
CHESAPEAKE BAY FOUNDATION,
Amicus Curiae,
NATURAL RESOURCES DEFENSE COUNCIL, INC.,
Amicus Curiae,
UNITED STATES OF AMERICA, -
Amicus Curiae.
Appeal from the United States District Court
for the District of Maryland
[Filed Oct. 17, 1986]
This cause came on to be heard on the record from the
United States District Court for the District of Mary-
land, and was argued by counsel.
54a
On consideration whereof, It is now here ordered and
adjudged by this Court that the judgment of the said
District Court appealed from, in this cause, be, and the
same is hereby, reversed and remanded for proceedings
consistent with this opinion.
/s/ John M. Greacen
Clerk
55a
APPENDIX E
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Civil Action No. B-86-220
THE POTOMAC ELECTRIC POWER COMPANY
Vv.
STEPHEN H. SACHS, in his capacity as Attorney General
of Maryland, and ADELE WILZACK, in her capacity as
Secretary of Ataryland Department of Health and
Mental Hygiene
ORDER
Presently pending in this litigation is Defendants’
Motion to Dismiss, or for Summary Judgment Based
Upon Lack of Jurisdiction, or for Stay (Paper 9), as to
which plaintiff has filed an opposition. Supplemental
memoranda have been filed on behalf of both plaintiff
and defendants; and the Court considers the issues to
have been comprehensively briefed. In addition, the
Court has had the benefit of oral argument on behalf of
all parties at a hearing herein on March 13, 1986.
Pursuant to an oral opinion to be rendered at a hear-
ing in this case on March 27, 1986, IT IS, this 25th day
of March, 1986, ORDERED as follows:
1. That the Defendants’ Motion to Dismiss, or for
Summary Judgment Based Upon Lack of Jurisdiction,
or for Stay (Paper 9), BE, and the same hereby IS,
———————————
es |
56a
DENIED, in all respects, and as to all of the relief
sought.
2. That copies of this Order are being transmitted
to counsel of record by the Court.
/s/ Walter E. Black, Jr.
WALTER E. BLACK, JR.
United States District Judge
57a
APPENDIX F
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Civil Action No. B-86-220
THE POTOMAC ELECTRIC POWER COMPANY
V.
STEPHEN H. SACHS, in his capacity as Attorney General
of Maryland, and ADELE WILZACK, in her capacity as
Secretary of the Maryland Department of Health and
Mental Hygiene
DECLARATORY JUDGMENT ORDER
On January 22, 1986, plaintiff, The Potomac Electric
Power Company, filed its Verified Complaint for De-
claratory Judgment herein, and contemporaneously filed
Plaintiff’s Motion for Summary Judgment, which was
accepted by the Court for filing on February 11, 1986.
Subsequently, on February 25, 1986, an opposition to
plaintiff's motion was filed on behalf of defendants,
Stephen H. Sachs, in his capacity as Attorney General
of Maryland, and Adele Wilzack, in her capacity as Sec-
retary of the Maryland Department of Health and Men-
tal Hygiene. The Court considers the issues to have been
fully briefed. The Court also had the benefit of oral
argument presented by counsel for the parties at a hear-
ing herein on March 27, 1986.
In accordance with the foregoing opinion of the Court,
IT IS, this 16th day of April, 1986, ORDERED, AD-
JUDGED and DECREED as follows:
58a
1. That Plaintiff's Motion for Summary Judgment
BE, and the same hereby IS, DENIED.
2. That the laws and regulations of the State of
Maryland which establish requirements governing the
manner and method of disposal of polychlorinated bi-
phenyls (PCBs) are not preempted by the provisions of
the Toxic Substances Control Act, 15 U.S.C. § 2601 et
seq. (TOSCA).
3. That the defendants’ costs in this litigation shall
be borne by plaintiff.
4. That the Clerk shall transmit copies of the fore-
going opinion and this Declaratory Judgment Order to
counsel of record for the parties to this litigation.
/s/ Walter E. Black, Jr.
WALTER E. BLACK, JR.
United States District Judge
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