Amicus Curiae Brief — Connecticut v. New Hampshire

SUPREME COURT OF THE UNITED STATES

NO. 119, ORIGINAL

STATE OF CONNECTICUT,

COMMONWEALTH OF MASSACHUSETTS,

STATE OF RHODE ISLAND AND

PROVIDENCE PLANTATIONS,

Plaintiffs,

Vv.

STATE OF NEW HAMPSHIRE,

Defendant.

MOTION OF THE MASSACHUSETTS

MUNICIPAL WHOLESALE ELECTRIC

COMPANY FOR LEAVE TO PARTICIPATE

AS AN AMICUS CURIAE IN THE

PRESENT ACTION.

Nicholas J. Scobbo, Jr.

Mitchell J. Sikora, Jr.

FERRITER, SCOBBO, SIKORA,

CARUSO & RODOPHELE,P.C.

One Beacon Street

Boston, MA 02108

Tel: 617-589-0700

Fax: 617-589-0701

MOTION.

_ The Massachusetts Municipal Wholesale Electric Company

("MMWEC") respectfully moves that the court grant it leave to

participate as an amicus curiae in the present action.

+

GROUNDS .

Guided by the criteria of Supreme Court Rule 37 controlling

participation by an appellate amicus curiae, MMWEC reports as

follows.

l. (a) MMWEC is a statutorily created corporation comprised

of 29 Massachusetts municipal electric departments and intended by

the Massachusetts Legislature to acquire and to sell to its

constituent members and other utilities electrical power at

economical rates. To that end, the Legislature has authorized and

enabled MMWEC to purchase electrical power and generating capacity

in greater volumes and at lower costs than would be available to

individual municipal electric departments; and to sell those

amounts of “public power" to its members and to other utility

purchasers at savings resulting from the scale of its activities.

(b) In legal character, MMWEC comprises a political

subdivision of the Commonwealth created by Massachusetts Statutes

1975, Chapter 775, §§1-25, codified as Massachusetts General Laws

Chapter 164, Appendix §§1-1 through 1-25 (hereinafter M.G.L. c.

164, App. §__). That enabling legislation provides that MMWEC’s

authority be "deemed and held to be in the performance of an

essential public function." M.G.L. c. 164, §1-2. As "a public

instrumentality," MMWEC is empowered to “acquire, construct,

operate or otherwise participate in electric power facilities to

meet the power requirements of its members." M.G.L. c. 164, §l-

5(p); MMWEC may contract with non-member utility companies located

inside or outside of Massachusetts. M.G.L. c. 164, App. §1-5(m).

(c) Because MMWEC has no stockholders, no retained

earnings, and no independent source of funds, it borrows money in

order to finance its acquisition or construction of electric

facilities. When members and/or other contracting utilities

express sufficient interest in a particular electric power source

or facility, MMWEC creates a planning, acquisition, and financing

vehicle knowns as a "project." To finance a project, MMWEC

borrows needed funds through long-term revenue bonds or other

forms of indebtedness M.G.L. c. 164, App. §1-9. It may issue such

long-term bonds only if the Massachusetts Department of Public

Utilities ("DPU"), after an adjudicatory hearing, determines such

an issuance to be “reasonably necessary for the proposed purpose"

and only upon such terms and conditions as the DPU may impose.

M.G.L. c. 164, App. §1-17.

(d) As a result of initial DPU authorization of fi-

nancing in 1976, 1977, 1980, and 1981, and contractual

arrangements undertaken during the period of 1976 - 1982, MMWEC

has purchased and presently maintains ownership of 11.59%

(133,324 KW) of the capacity and output of the Seabrook Station.

Under various power sales agreements, it sells that output to 28

Massachusetts participants, and one Rhode Island participant.

2. (a) As a joint owner of the Seabrook Station, MMWEC to

date has made payments of the New Hampshire Nuclear Station Prop-

erty Tax as follows:

Date Amount

September 13, 1991 $ 649,230.40

December 15, 1991 649,230.40

April 10, 1992 649,230.40

Total $1,947,691.20

(b) MMWEC does not engage in any business activity in

New Hampshire within the meaning of that state’s Business Profits

Tax. Consequently it has not, and does not, pay any amounts under

the statute. It has not, and does not, qualify for any credit or

set-off under that tax.

(c) As mandated by its enabling legislation, M.G.L. c.

164, App. §1-6(b), (c), and by its power sales agreements, MMWEC

has transmitted the Nuclear Station Property Tax onward to its

project participants, which bill the tax expense to their

customers (retail level consumers of business and residential

character), in the following manner. Since November, 1991, MMWEC

has billed the tax inerement monthly, under an annual budget as a.

level amount to each power sales agreement project participant

contracting with MMWEC for the output of Seabrook Station

capacity. The charges from MMWEC to its project participants are

not subject to any rate regulation. M.G.L. c. 164, §1-10(b). The

Massachusetts participants recognize the billings as a purchase

power expense so as to be able to recover the expense from their

customers. Those recoveries create revenues for repayment to

MMWEC.

3. Presently MMWEC is participating in the preparation of

the case before the Special Master as a source of information and

evidence accrued from its role as a substantial joint owner of the

Seabrook Station (Complaint, paragraph 7).

4. Its interests align generally with those of the Common-

wealth of Massachusetts, but contain several independent and

distinctive features.

(a) Its transmission of the New Hampshire tax burden

directly to its municipal light department members, other

contracting municipal light departments, and consumers, burdens

those entities with whom it is in a relationship of ongoing

business privity practicably closer and more immediate than those

entities’ parens patriae relationship with the Commonwealth.

Individually, those entities lack the resources to challenge the

New Hampshire tax burden in these proceedings. MMWEC is able to

participate, and is situated and motivated to protect the

interests of those municipal light departments and those consumers

to whom it reluctantly transmits the cost of the tax. In

traditional terms it would have direct standing to assert the

injury of the tax to itself and to its members, NAACP v. Button,

371 U.S. 415, 428 (1963); and jus tertiji standing to assert the

interests of its absent contracting purchasers and consumers. See

generally Griswold v. Connecticut, 381 U.S. 479, 481 (1965);

Barrows v. Jackson, 346 U.S. 249, 255-258 (1953); Pierce v.

Society of Sisters, 268 U.S. 510, 535 (1925); R.A. Sedler,

: ij to 2 = titut LJ Tertii in the s : ct,

71 YALE L.J. 599, 652-656 (1962); and NOTE, Standing to Assert

Constitutional Jus Tertii, 88 HARV. L. REV. 423, 431-436 (1974).

(b) While the parens patriae standing of the Common-

wealth appears to rest on firm grounds, Wyoming v. Oklahoma, 60

USLW 4119, 4123-4124 (1992), and Maryland v. Louisiana, 451 U.S.

725, 735-739 (1981), three dissenting Justices in the Wyoming case

expressed the view that a state, claiming parens patriae standing

in behalf of injured resident clients at the hands of absent third

parties, must eliminate alternate or “variable” causes of the

clients’ injury so as to demonstrate that their harm flows

reasonably directly or "“traceab{ly)" from the challenged conduct

of the defendant state. 60 USLW at 4127 (dissenting Opinion of

Justice Scalia, joined by the Chief Justice and Justice Thomas).

(i) As an indicated “third party” in the causal

chain of injury reaching the ultimate, but absent, ratepayer-

taxpayer, MMWEC wishes to furnish information, evidence, and

argument upon the course and effects of the tax.

(ii) In the same role, MMWEC wishes to corroborate

the parens patriae standing of the Commonwealth against any doubts

generated by the cited Wyoming dissenters’ analysis.

5. MMWEC’s participation will be efficient and unobtrusive.

It has monitored all papers and proceedings to date and reflected

carefully upon its proposed participation. It is familiar with

the status and agenda of the case. It will conform its involve-

ment to the existing plans of the Special Master.

CERTIFICATE OF SERVICE

CONCLUSION.

I, Mitchell J. Sikora, Jr., an attorney for the proposed

Therefore the Massachusetts Mutual Wholesale Electric Company amicus curiae Massachusetts Municipal Wholesale Electric Company,

requests the allowance of its Motion to Participate as an Amicus ‘ hereby certify that I have today undertaken service of that

Curiae. | client’s Motion for Leave to Participate as Amicus Curiae by means

of hand delivery or first class mailing of copies of the same to

all counsel of record and to the clerk for Special Master Vincent

Respectfully submitted, L. McKusick.

Wied rier J: Scolbe A (as)

Lai esl L Abie A: tom ft At ff

Nicholas J. Séobbo, Jr. 7 Li esp lO A cd perm | a.

Mitchell J. Sikora, Jr. Mitchell J‘ Sikora, Jr.

FERRITER, SCOBBO, SIKORA,

CARUSO & RODOPHELE, P.C. Dated: June 12, 1992.

One Beacon Street

Boston, MA 02108

(617) 589-0700

Dated: June 10, 1992.