Petition for Writ of Certiorari — Pataki v. Consolidated Edison Co. of New York
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Supreme Oeurt, U.S.
i FILED
| |
No.02- ~~ O22 858 SEP -3 2002
OFFICE OF THE CLEIRK
IN THE
Supreme Court of the United States
GEORGE E. PATAKI, in his official capacity
as Governor of the State of New York, et al.,
Petitioners,
v.
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.,
Respondent.
On PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES CourT OF APPEALS FOR THE SECOND CIRCUIT
es enna nn
PETITION FOR A WRIT OF CERTIORARI
CN IR SERRE AT cence eenecen
LAWRENCE MALONE ELioT SPITZER
General Counsel Attorney General of the
New York State State of New York
Public Service Commission CailrtLin J. HALLIGAN*
Three Empire State Plaza Solicitor General
Albany, NY 12223-1350 DANIEL SMIRLOCK
(518) 474-2510 Deputy Solicitor General
PETER H. SCHIFF
Senior Counsel
LAURA ETLINGER
Assistant Solicitor General
120 Broadway
= New York, NY 10271
* Counsel of Record (212) 416-8016
Attorneys for Petitioners Pataki and
Public Service Commission Members
175911 g
COUNSEL PRESS
(800) 274-3321 * (800) 359-6859 ir
i
QUESTIONS PRESENTED
1. Whether corporations are entitled to invoke the
protections of the Bill of Attainder Clause, U.S. Constitution,
art. I, § 10, cl. 1.
2. Whether Chapter 190 of the New York Laws of 2000,
a legitimate economic regulation that prohibited Con Edison
from recovering from its ratepayers replacement power costs
incurred as a result of a forced shut-down of its Indian Point
2 nuclear power plant, imposes punishment within the
meaning of the Bill of Attainder Clause.
ii
PARTIES TO THE PROCEEDING
Con Edison was the plaintiff in the courts below and is
the respondent in this Court. Governor Pataki, and Maureen
O. Helmer, Thomas J. Dunleavy, James D. Bennett, Leonard
A. Weiss, and Neal N. Galvin, in their official capacities as
Chair and Commissioners of the New York State Public
Service Commission, were the defendants below and are
petitioners in this Court. Sheldon Silver and Richard L.
Brodsky, as Speaker and Member of the New York State
Assembly, were intervenor-defendants below.
lil
TABLE OF CONTENTS
Page
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TRON OF COG AUMROTINNGS 2.6 ccc cece Vv
URNS ere eee ree re eee ee X
Sey ge ack as ep 54h aes a es 6 1
Statement of Jurisdiction ..............cee0e0- ]
Constitutional and Statutory Provisions Involved ... l
ia cae a4 oe 04 phe wos 3
SRS ERE Papa ener err 3
iy ts o's a nae ice eb ge ak o> oo 3
B. District Court Decision Granting
Permanent Injunction .............. 6
C. Second Circuit Decision ............ 6
Reasons for Granting ee a ee ee 8
I. The Court Below Decided the Important and
Unsettled Question of Whether a Corporation
is Entitled to the Protections of the Bill of
Re ra 8
Te Ne -aeY ST
iv
Contents
Page
A. The question whether a corporation may
avail itself of the protections of the Bill
- of Attainder Clause is unsettled and
should be answered by this Court ..... 9
B. This Court should grant certiorari because
the unwarranted expansion of the Bill of
R Attainder Clause by the court below is
of significant public importance ...... 12
II. The Second Circuit’s Determination that
Chapter 190 Constitutes “Punishment”
Conflicts with this Court’s Precedents and with
the Decisions of Other Circuits According
Substantial Deference to the Legislature in
Balancing Statutory Goals and Burdens ..... 17
A. The Second Circuit’s analysis departs
from the “functional test” set forth by
this Court for determining if a law
imposes “punishment” for purposes of
the Bill of Attainder Clause ......... 18
B. The Second Circuit’s scrutiny of Chapter
190’s purposes conflicts with the deference
accorded legislatures by other circuits
bene 65 HEEL CE ATEN te PERTAW a 08% 2 23
C. The Second Circuit’s finding of
¥ punishment departs from this Court’s
precedents protecting the legislature’s
authority to act within its traditional
MNS. Hiss BAS So a
TABLE OF CITED AUTHORITIES
Page
Cases: .
Bank of Augusta v. Earle,
Be Se. Sak neks ss Hicedetauneee 13
BellSouth Corp. v. F.C.C. (BellSouth IT),
162 F.3d 678 (D.C. Cir. 1998) ..... 11, 17, 23, 24, 25
BellSouth Corp. v. F-C.C. (BellSouth I),
144 F.3d 58 (D.C. Cir. 1998),
cert. denied, 526 U.S. 1086 (1999) .......... 11, 23
Brookpark Entertainment, Inc. v. Taft,
951 F.2d 710 (6th Cir. 1991), cert. denied,
ee ee Tee 12
Club Misty, Inc. v. Laski,
208 F.3d 615 (7th Cir.),
cert. denied, 531 U.S. 1011 (2000) ........... 11
Cummings v. Missouri,
rig iS Geoy gt) BRR pee 14, 15, 16, 20, 26
Dent v. West Virginia,
ea ie ee ne re eee eer 20
Duquesne Light Co. v. Barasch,
ininasigt sn Wh, | ORE EE EEO E Te 25
Ex parte Garland,
FE See He TEER. cv anche tacsechiaakewes 14
Extradition of McMullen, In re,
989 F.2d 603 (2d Cir. 1993),
cert. denied, 510 U.S. 913 (1993) ........... 19, 25
vi
Cited Authorities
Page
First Nat. Bank of Boston v. Bellotti,
435 U.S. TES CSTE) cc nccdvawecnns cosassns 13, 14
Flemming v. Nestor,
963 TE, GOS Ca: vv nda chads kes eeabers 19, 26
Fresno Rifle & Pistol Club, Inc. v. John K.
Van de Kamp, 965 F.2d 723 (9th Cir.1992) ...... 12
Hale v. Henkel,
SOT WB. SOCIO becca veces scatekeesinas 13
McMullen v. United States,
953 F.2d 761 (2d Cir. 1992), rev'd,
989 F.2d 603 (2d Cir. 1993) (en banc) ......... 25
Minnesota Rate Cases,
290 US .. Fae CEO eve ech ecwuceuecseeNewes 26
Navegar, Inc. v. United States,
192 F.3d 1050 (D.C. Cir. 1999),
cert. denied, 531 U.S. 816 (2000) ........ one SEE
Newton v. Consolidated Gas Co. of N.Y.,
250 US. DE TE hake kde Xan hans stheweee 26
Niagara Mohawk Power Corp., Matter of v.
Public Serv. Comm’n, 69 N.Y.2d 365 (1987) ... 5
Nixon v. Administrator of Gen. Servs.,
433 TB, GASP CTD sa 6 va eeWes cds hee hekeae passim
Pierce v. Carskadon,
SS Wh BOO LUO EED 5 con in tiperdssacives¥ens 14
—~e ee ee ee ee
vii
Cited Authorities
Page
Plaut v. Spendthrift Farm, Inc.,
Pa ee UE Wese ak bse esthesbausese 10, 11
SBC Communications, Inc. v. F.C.C.,
154 F.3d 226 (Sth Cir. 1998), ;
cert. denied, 525 U.S. 1113 (1999) ....... 11, 24, 25
Selective Serv. Sys. v. Minnesota Pub. Interest
Research Group, 468 U.S. 841 (1984) ....... passim
South Carolina v. Katzenbach,
Pe Sas DR CUE RS NG i eb de wkdakiccarc 9, 10, 15
Springfield Armory, Inc. v. City of Columbus,
805 F. Supp. 489 (S.D. Ohio 1992), rev'd,
yop eh ee fo te Beer 25
Trop v. Dulles,
eer rer oe ee 20
United Nuclear Corp. v. Cannon,
553 F. Supp. 1220 (D. R.I. (1982) ............ 25
United States v. Brown,
oR og err 10, 14, 16, 26
United States v. Lovett,
SEE Saw neccutbaeenseeeeas 10, 14
United States v. Morton Salt Co.,
PF UIT Ban WS Cac da ccsdbiurecds 13
United States v. White, 322 U.S. 694 (1944) ...... 14
viii
Cited Authorities
Page
Verizon Communs., Inc. v. F.C.C.,
_ US... 122 &. Ch. 1666 CAGGE) 2c cnccvces 15
Williams v. United States,
EE 66-cb eon dacvdwivoneient dk )
WMxX Techs., Inc. v. Gasconade County,
BGS F.56 BIDS COUGAR TFSI) ccc cccccccccess 12
United States Constitution:
Art. I, § 10, cl. 1 (Bill of Attainder Clause) ...... passim
Federal Statutes:
15 U.S.C. §§ 79-79z-6
(Public Utility Holding Company
Act of 1935, ch. 687) ........... ion waueane 12
ae EE oF bSs ph cenescdeéen ction l
SO Ue BOOED 68 68. eet bs bebe esdewa vhs 1
Federal Rule and Regulation:
Federal Rules of Civil Procedure
SE ED 86 vis howe des ceseb ies ds be aS ie 6
New York Statutes:
hes SP BE db adv bvcesnches biboer eed eke 4
eo. AT tee 4
ix
-——_-
Cited Authorities
Page
A NT TTC EET OT Te Tee eee 4
mF PTT TTT ree rire ie 4
A Bo SC PPT CT TT Tee TT Tee 4
Ei Os BPE ee heeds evcvevcnectecesee tees passim
Public Service Law §§ 64-77 .............00 eee 4
Miscellaneous:
Cassius M. Clay, Regulation of Public Utilities:
A Crucial Problem in Constitutional Government
CRUE EGE 408 C dabeeiVeweseeNad rece aeeeer 15
Michael L. Landsman, From Enemies of the Crown to
Regional Telephone Companies: Bills of Attainder
Reappraised, 15 Touro L. Rev. 761 (1999) ..... 16
-_——_
x
TABLE OFAPPENDICES
Appendix A — Opinion Of The United States Court
Of Appeals For The Second Circuit Decided
Eb a ak eae ne een eee een eas
Appendix B — Memorandum — Decision And Order
Of The United States District Court For The
Northern District Of New York Dated And Filed
SE os kbd cadens wae wee ee
Appendix C — Amended Judgment Of The United
States District Court For The Northern District Of
New York Dated July 2, 2002 ................
Page
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1
OPINIONS BELOW
The opinion of the United States Court of Appeals for
the Second Circuit, reported at 292 F.3d 338 (2d. Cir. 2002),
is set forth in Appendix A. The Memorandum Decision and
Order of the United States District Court for the Northern
District of New York granting Con Edison’s motion for a
permanent injunction, reported at 117 F. Supp. 2d 257
(N.D.N.Y. 2000), is set forth in Appendix B. The amended
judgment of the District Court, correcting a scrivener’s error on
remand from the Second Circuit, is set forth in Appendix C.
STATEMENT OF JURISDICTION
This Court has jurisdiction to review the decision of the
United States Court of Appeals for the Second Circuit
pursuant to 28 U.S.C. § 1254(1). The judgment of the Court
of Appeals was entered June 5, 2002. This petition is filed
within ninety days of that date, as required by 28 U.S.C. §
— 2101(c).
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
Bill of Attainder Clause, U.S. Constitution, Art. I, § 10,
cl. 1 provides:
“No State shall .. . pass any Bill of Attainder.”
Act of Aug. 8, 2000; Chapter 190 of 2000 New York Laws
provides in full:
AN ACT prohibiting the recovery of costs in connection with
a radiation leak at the Indian Point 2 Nuclear Facility on
February 15, 2000
2
The People of the State of New York, represented in Senate
and Assembly, do enact as follows:
§ 1. Declaration of legislative findings. The operator of
a nuclear generating facility has a high duty of care to protect
the health, safety and economic interests of its customers.
Rate regulation of nuclear operators should discourage the
taking of risks with regard to potential threats to public health
and safety.
By continuing to operate steam generators known to be
defective, and thereby increasing the risk of a radioactive
release and/or an expensive plant outage, the Consolidated
Edison Company failed to exercise reasonable care on behalf
of the health, safety and economic interests of its customers.
Therefore it would not be in the public interest for the
company to recover from ratepayers any costs resulting from
the February 15, 2000 outage at the Indian Point 2 Nuclear
Facility.
§ 2. With respect to the February 15, 2000 outage at the
Indian Point 2 Nuclear Facility, the New York state public
service commission shall prohibit the Consolidated Edison
_Company from recovering from its ratepayers any costs
associated with replacing the power from such facility. Such
prohibition shall apply to any such costs incurred until the
conclusion of such outage, or incurred at any time until all
defective steam generation equipment at the facility has been
replaced, whichever occurs later. Such prohibition shall apply
to automatic adjustment mechanisms as well as base rates or
any other rate recovery mechanism. The commission shall
order the company to refund any such costs which have been
recovered from ratepayers.
§ 3. This act shall take effect immediately.
Re ee ee ST RO eee
3
STATEMENT OF THE CASE
Introduction
This case concerns the validity of a state law that was
passed in response to a forced shutdown of the Indian Point
2 (“IP2”) nuclear power plant, located in New York State.
Chapter 190 of the New York Laws of 2000 prohibits Con
Edison, a regulated electrical utility, from passing on to its
ratepayers the cost of replacement energy it was required to
purchase to serve its customers’ energy needs during the
year-long shutdown (estimated at $250 million or more).
The Second Circuit struck down Chapter 190 as a violation
of the Bill of Attainder Clause. This holding is unprecedented,
for it is the first time a federal appeals court has invalidated
a statute on the ground that it operates as a bill of attainder
against a corporation. Additionally, in reaching that result,
the court below required an exceedingly close fit between
the statute’s concededly nonpunitive goals and its reach.
In doing so, it impermissibly expanded this Court’s test for
determining whether a statutory scheme imposes prohibited
punishment within the meaning of the Bill of Attainder
Clause.
A. Background
On February 15, 2000, a leak resulting from a tube rupture
in one of the four steam generators at the Indian Point 2
nuclear power plant in Westchester County, New York,
caused a radioactive release and the forced shutdown of
the reactor. The “Model 44” steam generators used at the
plant were known to have a history of tube degradation
leading to excessive cracking and thus the potential for tube
leaks. Con Edison, the operator of the IP2 plant at that time,
was the only nuclear plant operator in the country still using
the Model 44 steam generator. Notably, years earlier Con Edison
(along with other plant operators using the Model 44)
4
had sued the manufacturer over this problem and received
replacement generators, which Con Edison did not install.
The shutdown caused by the February 2000 leak
continued for almost one year, by which time Con Edison
had replaced the defective generators and restarted the plant.
During the shutdown, in order to supply its electric customers
with the power formerly generated at IP2, Con Edison
purchased replacement electricity from other sources in the
wholesale market at a daily cost of approximately $600,000.
The increased power costs associated with the shutdown have
been estimated at $250 million or more.
As a public utility, Con Edison’s rates are set by the State.
Originally, in New York as in most states, the State
Legislature set the rates for public utilities by legislative
enactment. See, e.g., Act of April 9, 1874, 1874 N.Y. Laws,
ch. 144 (setting rates that a Brooklyn utility may charge
for illuminating gas); Act of June 3, 1905, 1905 N.Y. Laws,
ch. 732 (setting maximum rate for electricity in New York
City). In 1907, the Legislature created the Public Service
Commission (“PSC”) and delegated to that agency authority
to set “just and reasonable” electricity rates and engage in
general regulatory oversight of the State’s public utilities.’
See Act of June 6, 1907, 1907 N.Y. Laws, ch. 429; Act of
June 14, 1910, 1910 N.Y. Laws, ch. 480; N.Y. Pub. Serv.
Law §§ 64-77 (McKinney 2002).
At the time of the tube rupture, Con Edison’s filed rates,
approved by the PSC pursuant to its delegated authority,
included a Fuel Adjustment Clause (“FAC”). This FAC
1. Until 1921, the Legislature continued to determine the
maximum rates that a utility could charge and delegated to the
PSC only the authority to set rates within the legislatively-set
maximum. See Act of March 30, 1921, 1921 N.Y. Laws, ch. 134,
§ 49 (authorizing PSC to set maximum rates).
5
allowed Con Edison to pass on to its customers a significant
portion of any monthly fuel costs that exceeded set estimates,
subject to retrospective review and adjustment if the PSC
later determined that the fuel costs were caused by
imprudence. See Matter of Niagara Mohawk Power Corp. v.
Public Serv. Comm’n, 69 N.Y.2d 365, 507 N.E.2d 287 (1987).
Immediately following the leak and forced shutdown,
the PSC began investigating the outage as part of a multi-
agency task force authorized by the Governor. It did not
initiate a formal proceeding to review whether the
replacement energy costs were reasonably incurred until
March 30, 2000, shortly after the statute at issue here was
introduced in the Assembly.? The PSC rejected a request by
a number of legislators to suspend operation of Con Edison’s
FAC, and thus prohibit further cost recovery from the
ratepayers, during the pendency of the proceeding.
In response to the leak and forced shutdown and the fact
that the increased power costs would otherwise be passed on
to the ratepayers, the New York State Legislature enacted
Chapter 190. The Legislature found that Con Edison had
increased the risk of an expensive plant outage by continuing
to operate known defective steam generators. It also found
that Con Edison had failed to exercise reasonable care to
protect the health, safety, and economic interests of its
customers. The law accordingly directed the PSC to prohibit
Con Edison from collecting replacement power costs
associated with the February 15 outage and to order Con
Edison to refund any such costs previously recovered from
its ratepayers. See Act of Aug. 8, 2000, 2000 N.Y. Laws,
ch. 190.
2. The PSC’s administrative proceeding has been informally
stayed during the pendency of this litigation.
6
B. District Court Decision Granting Permanent Injunction
Immediately following the enactment of Chapter 190,
Con Edison commenced this lawsuit in the United States
District Court for the Northern District of New York. In its
complaint, Con Edison claimed that the law violated the
federal constitution in six respects: as a denial of equal
protection, an impermissible bill of attainder, a confiscation
of its property without just compensation, a denial of
procedural due process and a violation of the Contracts and
Supremacy Clauses. The complaint named the Governor of
the State of New York and the chair and members of the
Public Service Commission as defendants. Sheldon Silver
and Richard L. Brodsky, respectively Speaker and Member
of the New York State Assembly, sought to intervene as
defendants, which the District Court permitted under
Rule 24(b)(2) of the Federal Rules of Civil Procedure.
Con Edison moved by order to show cause for a
preliminary and permanent injunction enjoining enforcement
of Chapter 190. On the parties’ written submissions (none of
the parties requested an evidentiary trial) and following oral
argument, the District Court held that the law violated Con
Edison’s right to equal protection and constituted an
impermissible bill of attainder. The court granted a permanent
injunction enjoining defendants from taking any action to
enforce Chapter 190. See Consolidated Edison v. Pataki,
117 F. Supp. 2d 257 (N.D.N.Y. 2000).
C. Second Circuit Decision
While expressing skepticism about the District Court’s
conclusion that Chapter 190 violated principles of equal
protection, the U.S. Court of Appeals for the Second Circuit
affirmed the district court’s judgment on the ground that
7
Chapter 190 constitutes an unlawful bill of attainder.
See Consolidated Edison v. Pataki, 292 F.3d 338, 345 & n.2
(2d Cir. 2002).
To do so, the Second Circuit had to determine squarely
an important and unsettled issue in federal law — whether a
corporation is entitled to the protections of the Bill of
Attainder Clause. Although admitting that it was “unable to
unearth any case in which a corporation has ultimately
prevailed in challenging legislation as a bill of attainder,”
id. at 348, and that no other court of appeals had so held,
the Second Circuit nonetheless concluded that corporations
are “individuals” that enjoy the protections of the Bill of
Attainder Clause. See id. at 348, 349. The court thus found
that Chapter 190 satisfied the second element of the bill of
attainder test (specificity) because it named “ ‘an identifiable
individual.’ ” See id. at 346, 349 (quoting Nixon v.
Administrator of Gen. Servs., 433 U.S. 425, 468 (1977)).
Because the court found it “incontrovertible” that
Chapter 190 lacked the protections of a judicial! trial
(the third element of a bill of attainder), see 292 F.3d at 346,
it focused its bill of attainder analysis on the first element —
whether Chapter 190 determines guilt and imposes
punishment. While largely ignoring the fact that the statute
at issue involved an element of ratemaking, the Second
Circuit first concluded that because Chapter 190 limited
Con Edison’s ability to recover these costs based upon a past
event — the IP2 outage — it was pronouncing guilt on
Con Edison. See id. at 349.
The court then analyzed whether Chapter 190 imposed
punishment. Its analysis focused on the “functional” test for
punishment, which looks to “ ‘whether the law under
challenge, viewed in terms of the type and severity of burdens
imposed, reasonably can be said to further nonpunitive
legislative purposes.’ ” Jd. at 351 (quoting Nixon, 433 U.S.
at 475). Under this test, the absence of any legitimate
8
legislative purpose provides evidence that the law was
intended as punishment of those affected by it. See Nixon,
433 U.S. at 475.
Although the Second Circuit recognized that Chapter 190
served a number of nonpunitive purposes, it found that there
was an insufficiently close fit between these nonpunitive
purposes and the burdens imposed by the statute. The court
reasoned that some of the replacement power costs — those
attributable to the time spent replacing the defective
generators — would have been incurred even if Con Edison
had not unreasonably delayed in replacing the generators.
See 292 F.3d at 353-54. Because it found that the denial of
replacement costs exceeded what was necessary to achieve
the legislative purposes, and that the Legislature could have
attempted to limit the disallowance more precisely, the court
concluded that the statutory scheme demonstrated an intent
to punish Con Edison and thus that Chapter 190 violated the
Bill of Attainder Clause. Accordingly, the court affirmed the
judgment of the District Court permanently enjoining
enforcement of this state law.’
REASONS FOR GRANTING THE PETITION
I. The Court Below Decided the Important and Unsettled
Question of Whether a Corporation is Entitled to the
Protections of the Bill of Attainder Clause.‘
3. Although affirming the District Court judgment, the Second
Circuit remanded the matter to the District Court to correct a
scrivener’s error in the original judgment, which stated that the
case was “dismissed” in plaintiff’s favor. See 292 F.3d at 355-56.
The amended judgment was entered by the District Court on July 2,
2002 (Appendix C).
4. The issue of whether corporations are entitled to the
protections of the Bill of Attainder Clause is properly presented for
(Cont'd)
9
The Court should grant certiorari in this case because
the court below addressed the unsettled issue of whether a
corporation is entitled to the protections of the Bill of
Attainder Clause, an important question that this Court has
never answered.
A. The question whether a corporation may avail itself
of the protections of the Bill of Attainder Clause is
unsettled and should be answered by this Court.
Neither the Supreme Court nor any circuit other than
the court below has ever relied upon the Bill of Attainder
Clause to invalidate a statute affecting a corporation. The court
below relied upon dicta in two decisions of this Court, neither
of which dealt with corporations and one of which did not
even involve a bill of attainder claim. The unprecedented
reach of its decision was apparent to the court below, which
recognized that it was “unable to unearth any case in which
a corporation has ultimately prevailed in challenging
legislation as a bill of attainder.” Consolidated Edison,
292 F.3d at 348 (emphasis added). An unsettled question of
such constitutional magnitude should be resolved by this
Court itself.
The Second Circuit relied upon a reference to the protections
offered “private groups” by the Bill of Attainder Clause in
South Carolina v. Katzenbach, 383 U.S. 301, 324 (1966).
See Consolidated Edison, 292 F.3d at 347. There is no reason
to think this reference encompasses corporations. Katzenbach
(Cont'd)
this Court’s review notwithstanding that petitioners Pataki and
the Public Service Commission members did not raise this issue in
the courts below, inasmuch as it was raised by the other parties to
the proceeding and decided by the Second Circuit. See Williams v.
United States, 504 U.S. 36, 41-43 (1992) (recognizing that Court’s
jurisdiction extends to issues raised or passed upon by the court
below).
10
involved a challenge to portions of the Voting Rights Act,
primarily on the ground that the statute exceeded Congress’s
authority and encroached on an area reserved to the States.
This Court accordingly noted that “[c]ourts have consistently
regarded the Bill of Attainder Clause of Article I and the
principle of the separation of powers only as protections for
individual persons and private groups, those who are
peculiarly vulnerable to nonjudicial determinations of guilt.”
Katzenbach, 383 U.S. at 324.
This statement was simply a succinct rejection of the
State’s bill of attainder and separation of powers claims on
the ground that these constitutional provisions do not protect
states. The specific reference to “private groups” had little if
any bearing on the holding that states cannot assert these
protections and therefore constitutes dictum. In any event,
the Court appears to have been referring only to the fact that
the Bill of Attainder Clause reaches legislation that targets
“easily ascertainable members of a group,” United States v.
Lovett, 328 U.S. 303, 315 (1946), such as members of a
political party, see, e.g., United States v. Brown, 381 U.S.
437 (1965) (members of Communist party), as well as
legislation that applies to specific persons. See Selective Serv.
Sys. v. Minnesota Pub. Interest Research Group, 468 U.S.
841, 852 (1984) (Bill of Attainder Clause prohibits legislative
punishment of “ ‘specifically designated persons or groups’ ”
(quoting United States v. Brown, 381 U.S. at 447 (emphasis
added))).
The other Supreme Court decision relied upon by the
Second Circuit, Plaut v. Spendthrift Farm, Inc., 514 U.S.
211 (1995), has an even more tenuous connection to the issue
here, for it did not involve a bill of attainder claim. Rather,
Plaut was a challenge to a provision of the Securities and
Exchange Act of 1934 on the ground that it required federal
courts to reopen final judgments in violation of principles of
separation of powers and due process. The sentence relied
11
upon by the court below appears in the portion of the opinion
rejecting the view, expressed in the concurrence, that the law
at issue effectively singled out a class of lawsuits or group
of defendants. See id. at 239 & n.9. The Court’s glancing
reference to a “firm” in this sentence is dictum, and cannot
be taken as any resolution of this important question.
Nor has any circuit other than the court below struck
down a statute on the ground that it operated as a bill of
attainder against a corporation, or fully analyzed whether
corporations are entitled to the protections of the Bill of
Attainder Clause. When considering bill of attainder
challenges brought by corporations, the federal courts of
appeals have rejected these challenges on the merits, finding
that the law did not impose punishment or was not sufficiently
specific. In doing so, the circuit courts have either assumed
that the Clause applies to corporations, with minimal analysis
to support that assumption (and relying in part on the dictum
of this Court in Plaut)* or simply rejected the bill of attainder
claim without addressing the issue of the plaintiff’s corporate
5. D.C. CIRCUIT: See BellSouth Corp. v. F-C.C. (BellSouth
Il), 162 F.3d 678, 684 (D.C. Cir. 1998) (parties and court assumed);
BellSouth Corp. v. F.C.C. (BellSouth I), 144 F.3d 58, 63 (D.C. Cir.
1998) (parties and court assumed, minimal analysis), cert. denied,
526 U.S. 1086 (1999); see also Navegar, Inc. v. United States, 192
F.3d 1050, 1065 (D.C. Cir. 1999) (citing BellSouth II, without
discussion, for general proposition that bill of attainder is a law that
“singles out individuals (or businesses) and imposes punishment”),
cert. denied, 531 U.S. 816 (2000). FIFTH CIRCUIT: See SBC
Communications, Inc. v. F-C.C., 154 F.3d 226, 234 & n.11 (5th Cir.
1998) (assumption & minimal analysis), cert. denied, 525 U.S. 1113
(1999). SEVENTH CIRCUIT: See Club Misty, Inc. v. Laski, 208
F.3d 615, 617 (7th Cir.) (in dictum, court “assumed without deciding”
that Bill of Attainder Clause protects corporations, but struck down
challenged measure on other grounds), cert. denied, 531 U.S. 1011
(2000).
12
status at all.© The Second Circuit therefore stands alone
among the federal circuits.
B. This Court should grant certiorari because the
unwarranted expansion of the Bill of Attainder
Clause by the court below is of significant public
importance.
The Court should grant certiorari because the decision
of the court below to extend the Bill of Attainder Clause to
corporations is of tremendous public importance and
represents an unwarranted expansion of the Clause.
First, the question of the applicability of the Bill of
Attainder Clause to corporations is of substantial public
importance because it will expose numerous laws regulating
businesses to constitutional challenge — even in highly-
regulated industries such as utilities, where legislatures have
traditionally exercised broad powers. Corporations will rely
on the decision of the court below — the first in which a
corporation has successfully challenged a statute under the
Bill of Attainder Clause — to attempt to block legitimate
corporate regulation aimed at identifiable groups of
corporations. It is not uncommon for Congress and the state
legislatures to target particular groups of corporations
through economic regulation. See, e.g., Public Utility
Holding Company Act of 1935, ch. 687, 15 U.S.C.
§§ 79-79z-6 (1997). And, because the specificity requirement
of the Bill of Attainder Clause is met where the legislation
singles out “an identifiable group,” Selective Service, 468 U.S.
at 847 n.3, corporations may well bring bill of attainder
challenges to many commonplace economic measures that
6. See, e.g., WMX Techs., Inc. v. Gasconade County, 105 F.3d
1195 (8th Cir. 1997); Fresno Rifle & Pistol Club, Inc. v. John K. Van
de Kamp, 9€5 F.2d 723, 727-29 (9th Cir. 1992); Brookpark
Entertainment, Inc. v. Taft, 951 F.2d 710, 717 - Cir. 1991), cert.
denied, 506 U.S. 820 (1992).
|
|
|
|
13
limit the conduct of or place regulatory burdens upon particular
industries. The Bill of Attainder Clause was never intended
to reach this type of corporate regulation, and only a decision
from this Court will settle the matter.
Second, the decision of the court below misapprehends
the purpose of the Clause and neglects the context in which
it has heretofore been applied. Although the Supreme Court
has not applied a consistent test to determine whether a
specific constitutional guarantee will be extended to
corporations, it has described the relevant considerations as
involving the “nature, history, and purpose of the particular
constitutional provision.” First Nat. Bank of Boston Vv.
Bellotti, 435 U.S. 765, 778 n.14 (1978). Additionally,
the nature of corporations as artificial persons, created
by and subject to regulation by the government, has also
been important to the Court’s analysis. See United States v.
Morton Salt Co., 338 U.S. 632, 652 (1950) (relying on the
public nature of corporations and their “collective impact
upon society, from which they derive the privilege of acting
as aftificial entities,” to conclude that corporations do not
enjoy same Fourth Amendment right to privacy as
individuals); Hale v. Henkel, 201 U.S. 43, 74-75 (1906)
(holding that corporations cannot invoke Fifth Amendment
privilege against self-incrimination); Bank of Augusta v. Earle,
38 U.S. 519 (1839) (corporation is not “citizen” within
meaning of the Privileges and Immunities Clause).
The nature, history and purpose of the Bill of Attainder
Clause all weigh strongly against extending it to corporations.
The Bill of Attainder Clause has not historically been applied
to statutes aimed at corporations, and the Second Circuit erred
in concluding otherwise. Corporations have begun to seek
protection under the Bill of Attainder Clause only very
recently and, as noted, the Clause has never been successfully
asserted by a corporation until now. The Clause has instead
been used exclusively to strike down statutes directed at
14
natural persons, either as specified individuals or as classes
of persons with a particular attribute; such as membership
in a political party, in common. This is highly significant,
for as this Court has noted, “[c]Jertain ‘purely personal’
guarantees ... are unavailable to corporations and other
organizations because the ‘historic function’ of the particular
guarantees has been limited to the protection of individuals.”
Bellotti, 435 U.S. at 778 n.14 (citing United States v. White,
322 U.S. 694, 698-701 (1944)).
Thus, for example, in United States v. Brown, 381 U.S.
437 (1965), the statute invalidated by the Court made it a
crime for members of the Communist Party to serve as
officers of a labor union. Similarly, in United States v. Lovett,
328 U.S. 303 (1946), the act struck down by this Court
restricted federal budget appropriations for the salaries of
specifically-named government employees who were named
as subversives in a House Report. And the only other cases
in which this Court has found bill of attainder protections
appropriate involved legislation punishing individuals who
had sided with the Confederacy in the Civil War. See Pierce
v. Carskadon, 83 U.S. 234 (1873) (loyalty oath denying
ex-Confederates right to seek judicial redress); Ex parte
Garland, 71 U.S. 333 (1867) (admission to practice of law
conditioned upon oath that individual had never borne arms
against or supported enemies of United States); Cummings
v. Missouri, 71 U.S. 277 (1867) (act making it a crime to
practice law or be a clergyman without taking an oath that
individual had not been disloyal to United States).
Given this historical context, the Second Circuit’s
conclusion that bills of attainder have been directed at both
corporations and individuals is without merit. Notably,
the court below supported this conclusion only with a citation
to a nineteenth-century English statute that stripped a borough
of its seats in Parliament based upon findings of bribery
and corruption. See Consolidated Edison, 292 F.3d at 348
15
(citing 1 & 2 Geo. IV, c.47 (1821)). But a borough is a
governmental entity; it is not a private corporation. And
nothing in American jurisprudence suggests that even
governmental entities are protected by the Bill of Attainder
Clause. See Katzenbach, 383 U.S. at 324 (states are not
protected by the Clause from acts of Congress).
Indeed, the complete absence of bill of attainder challenges
to the context in which this case arises — legislation
involving an element of ratemaking — underscores the
dramatic departure from historical practice by the court
below. Nor can this absence be explained on the ground that
it was rare for the legislatures to enact specific ratemaking
measures. To the contrary, before the creation of utility
commissions and the delegation of rate setting and utility
oversight to those bodies, legislatures commonly engaged in
rate setting through the enactment of legislation directed at
specific companies. See Verizon Communs., Inc. v. F-C.C.,
__ US. __, 1228. Ct. 1646, 1655 (2002) (discussing history
of utility regulation). As this practice evolved, constitutional
constraints on the practice evolved with it. Yet the
development of constitutional limitations in this area did not
include those of the Bill of Attainder Clause. Rather, the only
constitutional principle limiting such legislation was that of
the Takings Clause: a rate could not be so low as to amount
to a confiscation of property without just compensation.
See generally Cassius M. Clay, Regulation of Public Utilities:
A Crucial Problem in Constitutional Government 29-40
(1932).
Additionally, the purpose of the Bill of Attainder Clause
weighs against including corporations within its scope.
Historically, bills of pains and penalties (i.e., those imposing
a punishment less than death) were directed at politically
disfavored and vulnerable minorities. See Nixon, 433 U.S.
at 474; Cummings, 71 U.S. at 323. Accordingly, the types of
punishments historically associated with bills of pains and
16
penalties were the traditional punishments imposed upon
persons for disloyal activities and beliefs, i.e., imprisonment,
banishment, “punitive confiscation of property” by the
sovereign and the loss of civil and political liberties,
including the rights to vote, hold public office and participate
in specified employment or professions. See Selective
Service, 468 U.S. at 852; Nixon, 433 U.S. at 475; Brown,
381 U.S. at 441; Cummings, 71 U.S. at 323. And, as noted
above, the individuals punished by bills of attainder were
typically Communists or Confederates — persons perceived
as subversives or traitors and thus punishable without public
censure. A multi-billion-dollar monopoly is not such a
“disfavored” person.
Moreover, the fact that “punitive confiscation of
property” is one type of punishment historically imposed by
bills of attainder does not, contrary to the conclusion of the
court below, indicate that the Clause encompasses the types
of injury that a corporation could suffer. See Consolidated
Edison, 292 F.3d at 348-49. Rather, “punitive confiscation
of property” has a narrow historical meaning: as a result of
being branded as disloyal or accused of treason, an individual
forfeited his or her property to the government. See Nixon,
433 U.S. at 474 n.38 (citing state laws enacted following the
Revolutionary War, pursuant to which Tory sympathizers
were found guilty of treason and their property seized by the
state, as examples of bills of pains and penalties involving
the punitive confiscation of property); Michael L. Landsman,
From Enemies of the Crown to Regional Telephone
Companies: Bills of Attainder Reappraised, 15 Touro L.
Rev. 761, 763 (1999). The statute at issue here falls far outside
this category of traditional punishment. The Second Circuit
thus erred in relying upon the reference in this Court’s
decisions to the historical punishment of “punitive
confiscation of property” to conclude that corporations are
17
within the intended scope of the Bill of Attainder Clause.’
See BellSouth Corp. v. F-C.C. (BellSouth II), 162 F.3d 678,
686 (D.C. Cir. 1998) (“run-of-the-mill business regulations”
do not implicate concerns underlying historical punishments).
Il. The Second Circuit’s Determination that Chapter 190
Constitutes “Punishment” Conflicts with this Court’s
Precedents and with the Decisions of Other Circuits
According Substantial Deference to the Legislature
in Balancing Statutory Goals and Burdens.
This Court should grant certiorari because the Second
Circuit’s determination that Chapter 190 constitutes
“punishment” conflicts with this Court’s precedents in several
important ways and cannot be squared with the decisions of
other circuits according a legislative body wide leeway to
enact laws with a reasonably nonpunitive purpose. First,
the decision below departs from the “functional test”
developed by this Court to assess whether a statutory scheme
on its face evidences a punitive purpose. Although this Court
has held that the statutory burdens imposed by the legislature
need only “reasonably further” nonpunitive goals, the court
below required a close fit between Chapter 190’s nonpunitive
purposes and its means. Second, this insistence on a close
fit, as well as the Second Circuit’s reliance on the alleged
existence of “less burdensome alternatives,” conflicts with
the deference given Congress in similar cases by other
circuits. Third, the Second Circuit’s finding of “punishment”
7. The only bill of attainder case from this Court to analyze an
alleged modern confiscation of property was Nixon, which involved
a statute that in part ordered the General Services Administration to
retain control over President Nixon’s personal papers. With respect
to the President’s claim that the statute involved the punitive
confiscation of his property, the Court simply noted that the
availability of a just compensation remedy in the statute undercut
any such “colorable” claim. 433 U.S. at 475.
18
ignores this Court’s precedent stressing that the separation
of powers concerns underlying the Bill of Attainder Clause
are not implicated when a legislature acts within its traditional
sphere, as it did here by engaging in an element of ratemaking.
A. The Second Circuit’s analysis departs from the
“functional test” set forth by this Court for
determining if a law imposes “punishment” for
purposes of the Bill of Attainder Clause.
This Court has developed a three-part test for determining
whether a law imposes punishment within the meaning of
the Bill of Attainder Clause: (1) a historical test, which looks
to the types of punishment traditionally imposed by bills of
attainder; (2) a functional test, which asks whether the
challenged law, in light of the type and severity of the burden
imposed, reasonably furthers nonpunitive legislative
purposes; and (3) a motivational test, which looks for evidence
of a punitive purpose in the legislative history. See Selective
Service, 468 U.S. at 852; Nixon, 433 U.S. at 473, 475-76,
478. Here, the court below conceded that Chapter 190 did not
satisfy either the first or third prongs of this test,® and therefore
focused its analysis on the second prong — the “functional test.”
8. The court noted that:
[t]he only traditional punishment implicated here is
punitive confiscation of property ... [but] we are not
certain that a “deprivation” is the same thing as a
“confiscation,” and indeed, the Supreme Court has held
that an adverse utility-rate decision is not “confiscatory”
for purposes of the Takings Clause unless it provides an
overall unfair rate of return for the utility.
Consolidated Edison, 292 F.3d at 351 (citation omitted). The court
further found that “the evidence of punitive intent in the legislative
record in this case is insufficient on its own to justify a conclusion
that Chapter 190 is punitive.” Jd. at 354-55.
19
The functional test considers the statutory scheme on its
face, to determine “whether the law under challenge, viewed in
terms of the type and severity of burdens imposed, reasonably
can be said to further non-punitive purposes.” Nixon, 433 US.
at 475. The absence of any legitimate legislative purpose
provides evidence that the law was intended as punishment of
those affected by it. See id. at 475-76 (“Where such legitimate
legislative purposes do not appear, it is reasonable to conclude
that punishment of individuals disadvantaged by the enactment
was ihe purpose of the decisionmakers.”).
As Nixon directs, in determining whether a challenged
statute has a nonpunitive purpose, this Court has required
only that a statutory burden reasonably serve the statute’s
nonpunitive goals. For example, in Selective Service, its most
recent bill of attainder case, the Court characterized the
applicable test as “whether the challenged statute can be
reasonably said to further nonpunitive goals.” 468 U.S.
at 853-54 (emphasis added). There, the Court upheld the
challenged legislation, which conditioned receipt of federal
educational assistance on compliance with draft registration
requirements, because the statute was “a rational means”
to improve compliance and allocate government resources
and thus clearly furthered these nonpunitive purposes.
See id. at 853-56. Likewise, in Nixon, the Court found in the
legislative scheme at issue no evidence of punitive intent,
where the preservation of President Nixon’s papers served
legitimate and nonpunitive purposes. See 433 US. at 477-78;
see also Flemming v. Nestor, 363 U.S. 603, 617 (1960)
(no evidence of punitive intent on face of statute where
disqualification of certain deportees from social security
benefits bears some “rational connection” to legislative
purpose); Jn re Extradition of McMullen, 989 F.2d 603, 613
(2d Cir.) (en banc) (“the Supreme Court has indicated that
only when a legitimate purpose is not apparent will the Court
deem the purpose of the decisionmaker to be the punishment
of the individual”), cert. denied, 510 U.S. 913 (1993).
20
And in the instances where this Court has found evidence
of punitive intent under the “functional test,” it has noted
that the challenged law was not supported by any rational
and nonpunitive purpose. See Cummings, 71 U.S. at 319-20
(striking down state constitutional provision requiring loyalty
oath as imposing punishment where there is “no possible
relation” between subject of oath and fitness for enumerated
positions); see also Dent v. West Virginia, 129 U.S. 114, 128
(1889) (upholding statutory qualifications governing practice
of medicine that related to skill and knowledge of practitioner
and distinguishing cases involving loyalty oaths that had no
connection to fitness). Cf Trop v. Dulles, 356 U.S. 86, 96-97
(1958) (plurality opinion) (holding that statutory forfeiture
of citizenship upon conviction for desertion was penal for
purposes of Eighth Amendment claim because statute lacked
any rational purpose except to punish deserter).
The Second Circuit, however, disregarded this Court’s
legal standard, instead adopting a rule that requires
invalidation of a statute if it does not have a precise fit
between the statute’s goals and burdens, or if no “wholly non-
punitive purpose” can be discerned. Consolidated Edison,
292 F.3d at 351, 352-54.
The court below recognized that the cost disallowance
imposed by Chapter 190 serves two legitimate and
nonpunitive purposes: (1) a cost-allocation purpose, because
it places the burden of unreasonably incurred costs on the party
the Legislature found responsible for them, rather than on
innocent ratepayers, and (2) an economic-regulatory purpose,
because it promotes economic efficiency by encouraging Con
Edison, a regulated monopoly, to avoid similar future costly
errors. See id. at 351-53.
While acknowledging the legitimate and nonpunitive
nature of these purposes, the court invalidated the statute
based on its conclusions that Con Edison should have been
21
allowed to recover some percentage of its costs and that
the Legislature could have enacted a more tailored, “less
burdensome” statute. Id. at 352-54. It relied on its finding
that Chapter 190 denies to Con Edison a portion of the
replacement power costs (those attributable to time spent
replacing the defective generators) that would have been
incurred even in the absence of Con Edison’s misconduct,
concluding that denying Con Edison recovery of this
unquantified percentage of the replacement power costs did not
serve the statute’s nonpunitive purposes. See id. at 353-54.
Because it could “discern no wholly non-punitive purpose to
justify the entire cost-pass-through prohibition in Chapter 190,”
the court found the statute itself provided evidence of a
\ punitive purpose. Id. at 351, 352-54.
If the court below had applied the “functional test” set forth
by this Court, instead of substituting a more rigorous standard,
it would have concluded that the fit between Chapter 190’s
purposes and means is sufficient to avoid any implication of
punitive intent. The Second Circuit recognized that Chapter 190
serves legitimate and nonpunitive purposes as a cost-allocation
and economic regulatory measure. See id. at 352. It further
found that these purposes are reasonably furthered by
disallowing Con Edison the replacement power costs associated
with the unplanned outage, since the Legislature found that
Con Edison’s unreasonable conduct in failing to timely
replace the defective generators caused the outage. See id.
Moreover, as the court below acknowledged, the
replacement power costs incurred by Con Edison in actually
replacing the defective generators during this unplanned
outage were not necessarily as low as the replacement costs
it would have incurred if it had replaced the generators sooner
during a planned outage. See id. at 353. Thus, even if the
disallowance imposed by Chapter 190 were arguably
overbroad, it still reasonably serves the statute’s nonpunitive
liga
je,
22
cost-allocation and economic deterrence purposes and therefore
does not evince a punitive purpose.’
The Second Circuit’s disregard for this Court’s articulation
of the “functional test” was compounded by its analysis of
the availability of “less burdensome alternatives.” In applying
the “functional test,” the court found that Chapter 190 was
punitive in part because the Legislature allegedly could have
met its nonpunitive goals with a more narrowly-tailored law,
one that limited the disallowance to reflect more accurately
only the increase in power costs caused by Con Edison’s
failure to replace the defective generators at an earlier time,
before they caused a leak and forced shutdown. See 292 F.3d
at 354. This reliance upon “less burdensome alternatives”
cannot be squared with this Court’s bill of attainder precedents.
In Nixon, this Court stated that “in determining whether
a legislature sought to inflict punishment on an individual,
it is often useful to inquire into the existence of less
burdensome alternatives.” 433 U.S. at 482.'° The Court’s
reference to “less burdensome alternatives” is found in its
discussion and application of the third prong of the test
for punishment, the “motivational test” in which the Court
evaluates “whether the legislative record evinces a congressional
9. The Second Circuit’s reliance on the retrospective focus of
Chapter 190 in concluding that the statute imposes punishment,
see 292 F.2d at 349, is misplaced. This focus results directly from
the nature of the fuel adjustment clause, which necessarily involves
retrospective review of the reasonableness of the costs.
10. Notably, in Nixon, the Court considered, and rejected,
the President’s less burdensome alternatives argument “in light of
the unique posture of this controversy.” 433 U.S. at 482. The Court
did not consider, or even mention, less burdensome alternatives in
its subsequent decision in Selective Service, 468 U.S. 841.
23
intent to punish.” See id. at 478. Nixon’s mention of “less
burdensome alternatives” indicates only that a court may
consider this question as one factor in determining whether
the legislature intended to punish an individual, rather than
to legitimately regulate his conduct. It clearly was not intended
to change the “reasonably furthers” aspect of the Court’s
“functional test” into a “least restrictive means” test, which
is essentially what the court below did. This Court’s
precedents require only that the burdens be reasonably
proportionate to the statute’s nonpunitive goals, not that they
be the least burdensome means. This Court has never
indicated that a law imposes punishment simply because the
legislature could have designed a different statutory scheme
more appealing to a reviewing court.
B. The Second Circuit’s scrutiny of Chapter 190’s
purposes conflicts with the deference accorded
legislatures by other circuits.
The narrow window of permissible legislative draftmanship
afforded by the Second Circuit’s decision conflicts not only
with this Court’s precedents, but with the substantial
deference accorded to legislatures by other circuits. Unlike
the Second Circuit, which seized on the belief that the
Legislature’s cost allocation could have been more exact and
that a less-burdensome alterative to Chapter 190 existed,
the Fifth and D.C. Circuits have acknowledged that a statute
survives a Bill of Attainder challenge if some reasonable
nonpunitive purpose is identified. See Navegar, 192 F.3d
at 1068 (rejecting bill of attainder challenge where legislation
does not exhibit “a purely punitive purpose” (emphasis
added)); BellSouth IT, 162 F.3d at 688-89 (rejecting challenge
upon finding “convincing evidence of legitimate, nonpunitive
purposes”); BellSouth I, 144 F.3d at 66 (asking whether
“Congress cannot rationally be said to have pursued
24
nonpunitive purposes”(emphasis added)); SBC, 154 F.3d
at 241 (“Nixon stands ultimately and concisely for the
following proposition: if legislation has a legitimate
nonpunitive function, purpose, and structure, it does not
constitute punishment for purposes of the Bill of Attainder
Clause.”’).
Moreover, at least one circuit has directly concluded,
contrary to the court below, that the Bill of Attainder Clause
does not permit invalidation of a statute simply because the
court might select a different, even less burdensome way to
solve a problem:
Congress may read the evidence before it in a
different way than might this court or any other,
so long as it remains clear that Congress was
pursuing a legitimate nonpunitive purpose. In other
words, it does not matter that Congress arguably
could have enacted different legislation .... The
main point here is that it cannot be legitimately
suggested that the [asserted statutory purpose was]
so feeble that no one could reasonably assert [it]
except as a smoke screen for some invidious purpose.
BellSouth II, 162 F.3d at 689 (internal citation omitted);
see also SBC, 154 F.3d at 241-42 (“prophylactic” legislation
that imposes regulatory restrictions to protect the public from
future bad acts is not prohibited by the Bill of Attainder
Clause). Indeed, the D.C. and Fifth Circuits appear to have
found the existence of any less burdensome alternatives
relevant only to the third prong of the Nixon test (whether a
legislature intended to punish an individual), rather than
having any bearing on whether the statute furthers
nonpunitive purposes and thus passes the “functional” test.
25
See BellSouth II, 162 F.3d at 689; id. at 696 (Sentelle, J.,
concurring in the result); SBC, 154 F.3d at 244."
C. The Second Circuit’s finding of punishment
departs from this Court’s precedents protecting
the legislature’s authority to act within its
traditional sphere.
Finally, the Second Circuit's analysis departs from this
Court’s precedents that protect a legislature’s authority
to act within its traditional sphere without running afoul
of the Bill of Attainder Clause. The court below ignored
the fact that the Legislature was engaged in legitimate
regulation, rather than punishment, in enacting Chapter 190.
This error, if left undisturbed, could embolden utilities to
transform quantification disputes into constitutional claims
in contravention of this Court’s teachings.
The court below failed to recognize that in safeguarding
ratepayers from the effects of imprudent action by Con
Edison, the Legislature was addressing a purely legislative
concern. See Duquesne Light Co. v. Barasch, 488 U.S. 299,
313 (1989) (“We have never doubted that state legislatures
11. In earlier decisions, the Second Circuit likewise considered
the existence of legislative alteratives in connection with the
motivational test. See Jn re Extradition of McMullen, 989 F.2d 603,
613 (2d Cir. 1993) (en banc); id. at 619 (Altimari, J., concurring in
part & dissenting in part); McMullen v. United States, 953 F.2d 761,
767-68 (2d Cir. 1992) (panel decision), rev ’d on other grounds, 989
F.2d 603 (2d. Cir. 1993) (en banc); see also Springfield Armory, Inc.
v. City of Columbus, 805 F. Supp. 489, 495 (S.D. Ohio 1992), rev'd
on other grounds, 29 F.3d 250 (6th Cir. 1994). But cf: United Nuclear
Corp. v. Cannon, 553 F. Supp. 1220, 1227-28 (D. R.I. 1982)
(indicating that court should consider motivation of legislature and,
where statute unambiguously imposes punishment, existence of less
burdensome alternatives in determining whether punishment furthers
nonpunitive end).
26
are competent bodies to set utility rates. And the Pennsylvania
PUC is essentially an administrative arm of the legislature.”
(citing Minnesota Rate Cases, 230 U.S. 352, 433 (1913)
(“The rate-making power is a legislative power and
necessarily implies a range of legislative discretion.”))).
This Court has held that the Bill of Attainder Clause was
not designed to limit the legislature when it is acting within
its traditional legislative sphere; rather, it was intended to
protect against encroachment by the legislature into the
judicial function of determining guilt and imposing
punishment on an individual basis. See Flemming, 363 U.S.
at 616 (“Where no persuasive showing of a purpose ‘to reach
the person, not the calling,’ has been made, the Court has
not hampered legislative regulation of activities within its
sphere of concern, despite the often-severe effects such
regulation has had on the persons subject to it.” (quoting
Cummings, 71 U.S. at 320)); Brown, 381 U.S. 437, 442
(“the Bill of Attainder Clause was intended ... as an
implementation of the. separation of powers, a general
safeguard against legislative exercise of the judicial function,
or more simply — trial by legislature”). But these separation
of powers concerns are not implicated when the legislature
is involved in an aspect of ratemaking, which has never been
a judicial function. See Newton v. Consolidated Gas Co. of
N.Y., 258 U.S. 165, 177 (1922) (“Rate making is no function
of the courts and should not be attempted either directly or
indirectly.”’).
Only by ignoring the Legislature’s legitimate concern in
rate matters and by improperly extending this Court’s
precedents was the court below able to conclude that Chapter
190 violates the Bill of Attainder Clause.
27
CONCLUSION
For the foregoing reasons, the petition for a writ of
certiorari should be granted.
Respectfully submitted,
Eviot SPItzER
Attorney General of the
State of New York
CalIrTLin J. HALLIGAN*
Solicitor General
DANIEL SMIRLOCK
Deputy Solicitor General
Peter H. SCHIFF
Senior Counsel
LAURA ETLINGER
Assistant Solicitor General
120 Broadway
New York, NY 10271
(212) 416-8016
LAWRENCE MALONE
General Counsel
New York State
Public Service Commission
Three Empire State Plaza
Albany, NY 12223-1350
(518) 474-2510
* Counsel of Record
Attorneys for Petitioners Pataki
and Public Service Commission
Members
APPENDIX
la
APPENDIX A — OPINION OF THE UNITED STATES
COURT OF APPEALS FOR THE SECOND CIRCUIT
DECIDED JUNE 5, 2002
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term 2000
(Argued May 21, 2001 Decided June 5, 2002)
Docket Nos. 00-9358(L), 00-9426(CON),
00-9442(CON)
CONSOLIDATED EDISON COMPANY OF NEw YorK, INC.,
Plaintiff-Appellee,
—_V.—
Georce E. Patakl, in his official capacity as Governor of the
State of New York, Maureen O. HEvmer, in her official
capacity as Chairman of the New York State Public Service
Commission, THomMas J. DuNLEAvVY, JAMES D. BENNETT,
LEONARD D. Welss and NEAL N. GALvin in their official
capacities as Commissioners of the New York State Public
Service Commission,
Defendants-Appellants,
RICHARD L. Bropsky, New York State Assembly Member
and SHELDON SILVER, New York State Assembly Speaker,
Intervenors-Defendants-Appellants.
eSB AAR Sk nial s AE ER AeA Ante aoe that
2a
Appendix A
Before:
Wa ker, Chief Judge, Jacoss, Circuit Judge,
Larimer, Chief District Judge.*
Defendant state officials appeal from a judgment of
the United States District Court for the Northern District of
New ‘fork (Lawrence E. Kahn, District Judge) permanently
enjo?aing enforcement of a state statute against plaintiff
Consolidated Edison Company of New York, Inc. on the
grounds that the statute violate the Equal Protection Clause
of the Fourteenth Amendment and the Bill of Attainder Clause
of Article I, Section 10 of the United States Constitution.
Affirmed and remanded for correction of judgment.
a
JOHN M. WALKER, Jr., Chief Judge:
Defendant state officials appeal from a judgment of the
United States District Court for the Northern District of New
York (Lawrence E. Kahn, District Judge) permanently enjoining
enforcement of a New York state statute against plaintiff
Consolidated Edison Company of New York, Inc. (“Con Ed”)
on the grounds that the statute violated the Equal Protection
Clause of the Fourteenth Amendment and the Bill of Attainder
Clause of Article I, Section 10 of the United States Constitution.
We affirm solely on the basis of Art. I, § 10, but remand to the
district court to correct a scrivener’s error in the judgment.
* The Honorable David G Larimer of the United States District
Court for the Western District of New York, sitting by designation.
3a
Appendix A
BACKGROUND
Plaintiff Con Ed is a public utility that provides electrical
power to New York City. Among Con Ed’s power plants is
the Indian Point 2 Nuclear Generating Facility (“IP2”) located
in Westchester County, New York. The statute at the heart of
this appeal was enacted in response to a power outage at IP2
caused by a defective generator.
Until recently, IP2 produced electricity with four “Model
44” steam generators that Con Ed had purchased from the
Westinghouse Corporation (“Westinghouse”) in 1972. In the
late 1970s, Westinghouse learned that the steam generator
tubes on both its Model 44 and 51 steam generators were
subject to corrosion and failure. By 1997, seven of the eight
nuclear power plants using the Model 44 had replaced their
generators. Although other power plants apparently continued
to use the similarly flawed Model 51 steam generators,
only IP2 continued to use the flawed Model 44 generators.
Con Ed purchased replacement generators for IP2 in 1985,
but, prior to the incident at issue in this litigation, had never
installed them. .
On February 15, 2000, a steam tube in one of IP2’s Model
44s developed a crack which released radioactive steam into
the surrounding nonradioactive water that is converted to
steam to turn IP2’s power-generating turbines. A subsequent
investigation by the federal Nuclear Regulatory Commission
(“NRC”) and the New York State Public Service Commission
(“PSC” or “the Commission”) revealed no evidence of
elevated radiation levels offsite due to the incident.
The cracked tube was promptly discovered and Con Ed took
4a
Appendix A
IP2 offline to replace the generator. By January 2001, it had
finished replacing the damaged generator with one purchased
in 1985 and restarted IP2. To cover electricity demand while
IP2 was offline, Con Ed was forced to purchase electricity
from other sources.
Con Ed operates IP2 in a complex regulatory environment.
The public health and safety aspects of its operations are
regulated by the NRC under the Atomic Energy Act of 1954,
42 U.S.C. § 2011 et seq. (1994). The rates that Con Ed charges
its customers are regulated by the PSC, an independent state
regulatory body created early in the twentieth century.
A 1997 settlement agreement resolved a number of
outstanding disputes between Con Ed and the PSC that have
no bearing on this appeal. The agreement amended Con Ed’s
rate and was adopted in the form of a rate order by consent.
Of relevance to this appeal, the agreement includes a so-called
“fuel adjustment clause” (“FAC”), which allows Con Ed to
pass certain costs along to its ratepayers in the form of
temporary rate increases. Con Ed’s authority to pass costs
through to ratepayers under the FAC is subject to statutory
review by the PSC to determine whether those costs are
prudently or “reasonably” incurred, in order to ensure just
and reasonable rates. N.Y. Pub. Serv. Law § 66(12)(k) (2001);
see Long Island Lighting Co. v. Pub. Serv. Comm’n,
523 N.Y.S.2d 615, 620 (N.Y. App. Div. 1987). The PSC is
empowered to bar Con Ed from passing imprudently incurred
costs along to ratepayers and to force the utility to refund
imprudently incurred costs already recouped. N.Y. Pub. Serv.
Law § 66(12)(k) (2001).
5a
Appendix A
Pursuant to the FAC, Con Ed increased its rates to
incorporate the cost of purchasing replacement electricity and
the other costs associated with the outage. Soon after the
incident, the PSC staff began a prudence investigation of the
IP2 outage, and on March 30, 2000, the PSC itself initiated a
prudence review. It is our understanding that this review is
still incomplete as of the issuance of this opinion. :
iy On February 18, 2000, three days after the outage,
the New York State Assembly issued a notice of a joint
public hearing of the Assembly Committees of Energy,
Environmental Conservation, and Corporations, Authorities,
and Commissions, to be held on a variety of topics related to
the outage and Con Ed’s operation of IP2. The notice
listed potential topics including: the environmental effects
of the incident, deterioration of facilities at IP2, the need for
greater regulatory oversight of nuclear power in New York,
and the potential sale of the IP2 plant. The hearing was held on
March 3, 2000, and it covered the range of topics listed in the
notice. Con Ed’s Chief Operating Officer, J. Michael Evans,
and its Vice President of Maintenance and Construction, Stephen
Quinn, testified. They later supplemented their testimony in
a six-page letter to several members of the committee.
On March 20, 2000, intervenors-defendants Representatives
Brodsky and Silver introduced the bill that is the subject of the
present lawsuit. See A. 10096, 2000 Assembly (N.Y. 2000).
One week later, on March 27, the Assembly and Senate passed
the bill without amendment. Governor Pataki signed it into
law on August 8 as Chapter 190 of the Laws of 2000
6a
Appendix A
(“Chapter 190”). See Act of Aug. 8, 2000, ch. 190, 2000 N.Y.
Laws, (hereinafter, 2000 N.Y. Laws 190). Chapter 190 reads,
| in full, as follows:
§ 1. Declaration of legislative findings. The operator
of a nuclear generating facility has a high duty of
care to protect the health, safety and economic
interests of its customers. Rate regulation of
nuclear operators should discourage the taking of
risks with regard to potential threats to public
health and safety.
By continuing to operate steam generators
known to be defective, and thereby increasing the -
risk of a radioactive release and/or an expensive
plant outage, the Consolidated Edison Company
failed to exercise reasonable care on behalf of the
health, safety and economic interests of its
customers. Therefore it would not be in the public
interest for the company to recover from
ratepayers any costs resulting from the February
15, 2000 outage at the Indian Point 2 Nuclear
Facility.
§ 2. With respect to the February 15, 2000 outage
at the Indian Point 2 Nuclear Facility, the New
York state public service commission shall
prohibit the Consolidated Edison Company from
recovering from its ratepayers any costs associated
with replacing the power from such facility.
Such prohibition shall apply to any such costs
incurred until the conclusion of such outage,
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Appendix A
or incurred at any time until all defective steam
generation equipment at the facility has been
replaced, whichever occurs later. Such prohibition
shall apply to automatic adjustment mechanisms
as well as base rates or any other rate recovery
mechanism. The commission shall order the
company to refund any such costs which have been
recovered from ratepayers.
§ 3. This act shall take effect immediately.
The PSC has estimated that Con Ed would have been able to
pass on to its customers approximately $250 million in
increased costs that Chapter 190 requires it to internalize.
On August 14, 2000, Con Ed filed suit in the District
Court for the Northern District of New York, seeking a
declaratory judgment and permanent injunction barring
enforcement of the statute on various constitutional grounds
and on August 17 moved for a preliminary injunction.
Con Ed alleged that the statute violated the Equal Protection
Clause of the Fourteenth Amendment, the Bill of Attainder
Clause of Article I, Section 10, the Due Process Clause of
the Fourteenth Amendment (alleging a violation of procedural
due process and an uncompensated taking), the Supremacy
Clause, and the Contracts Clause of Article I, Section 10.
On September 6, 2000, the district court granted a motion
by Representative Brodsky, a member of the Assembly,
and Representative Silver, the speaker of the Assembly,
to intervene in the-suit.
8a
Appendix A
In amemorandum order dated October 10, 2000, the district
court granted Con Ed’s request for a permanent injunction
and denied as moot Con Ed’s motion for a preliminary
injunction. Con Ed v. Pataki, 117 F. Supp. 2d 257 (N.D.N_Y.
2000). The district court agreed with Con Ed that the statute
violated the Equal Protection Clause, finding that Chapter 190
was not rationally related to the state’s legitimate interest in
deterring negligence at nuclear power plants. Jd. at 262-65.
The district court also held that Chapter 190 constituted an
impermissible Bill of Attainder because the statute named
Con Ed and was the product of a legislative intent to punish
Con Ed. /d. at 265-71. The court expressly refused to reach
Con Ed’s other constitutional claims. After judgment was
entered on December 4, 2000,' the defendants appealed.
DISCUSSION
Because we conclude that Chapter 190 is an unconsti-
tutional bill of attainder, we affirm the district court. We need
not and do not address Con Ed’s other constitutional theories.”
1. The judgment incorrectly, and incomprehensibly, stated that
“the case is DISMISSED in its ENTIRETY, in favor of the Plaintiff.”
We accordingly remand for correction of this obvious scrivener’s
error. See infra, Part II.
2. We thus do not decide whether Chapter 190 violates the Equal
Protection Clause, which supplied one basis for the district court’s
injunction. We are skeptical, however, that the Clause would require
invalidation of Chapter 190: “[MJere underinclusiveness is not fatal
to the validity of a law under . . . equal protection[,] even if the law
disadvantages an individual or identifiable members of a group.”
(Cont’d)
9a
Appendix A
I. The Bill of Attainder Clause of Article I, Section 10
The Constitution includes two clauses prohibiting enact-
ment of “bills of attainder”: Section 9 applies to Congress,
Section 10 to the states. See U.S. Const. art. I, §§ 9, 10.
The history of bills of attainder and of pains and penalties in
England,’ which gave rise to the constitutional prohibitions
in § 9 and § 10, has been aptly described elsewhere, and we
see no need to reiterate it here. See Jn re Extradition of
McMullen, 989 F.2d 603, 604-06 (2d Cir. 1993) (in banc).
Briefly stated, a constitutionally proscribed bill of attainder
is “a law that legislatively determines guilt and inflicts
punishment upon an identifiable individual without provision
of the protections of a judicial trial.” Nixon v. Adm’r of Gen.
Servs., 433 U.S. 425, 468 (1977); see also United States v.
Lovett, 328 U.S. 303, 315 (1946) (“[L]egislative acts, no matter
what their form, that apply either to named individuals or to
easily ascertainable members of a group in such a way as to
inflict punishment on them without a judicial trial are bills
of attainder prohibited by the Constitution.”). Put another way,
(Cont'd)
Nixon v. Adm’r of Gen. Servs., 433 U.S. 425, 471 n.33 (1977) (internal
citations omitted). To be so invalidated, the classification must have
“no rational basis,” Village of Willowbrook v. Olech, 528 U.S. 562,
564 (2000), and we doubt that the present statute meets that standard.
3. In English practice, bills of attainder imposed the death
penalty. Other, less severe punishments were imposed by “bills of
pains and penalties.” The Supreme Court has held that the
constitutional prohibition reaches both. See United States v. Brown,
381 U.S. 437, 447 (1965); Fletcher v. Peck, 10 U.S. (6 Cranch)
87, 138 (1810) (Marshall, C.J.) (“A bill of attainder may affect the
life of an individual, or may confiscate his property, or may do both.”).
10a
Appendix A
the Clause bars the imposition of punishment resulting from
“trial by legislature.” United States v. Brown, 381 U.S. 437,
442 (1965).
Under the definition quoted above from Nixon, a statute
can be a bill of attainder only if (1) it “determines guilt and
inflicts punishment,” (2) “upon an identifiable individual,”
and (3) “without provision of the protections of a judicial trial.”
Nixon, 433 U.S. at 468. In the present case, the lack of a judicial
trial is incontrovertible. Chapter 190 was enacted by the state
legislature using purely legislative processes, without any
additional protections akin to those present in a judicial trial.
At issue, then, are only the questions of whether (1) Con Ed,
singled out as it was by Chapter 190, is an “individual”
that may invoke the protection of the Clause, (2) Chapter 190
“determines guilt,” and (3) Chapter 190 “inflicts punishment.”
We answer all three questions in the affirmative.‘
4. Our analysis is unaffected by separation of powers principles,
on which the district court relied heavily, 117 F. Supp. 2d at 268,
citing Brown, 381 U.S. at 441, 443-45. Brown was decided under
the Clause applicable to Congress in Article I, § 9, not that in § 10,
which applies to the states. Brown's statements about separation of
powers doctrine are inapplicable to the § 10 Bill of Attainder Clause
for the simple reason that the federal Constitution does not impose
any particular separation of powers requirement on state governments:
“How power shall be distributed by a state among its governmental
organs is commonly, if not always, a question for the state itself.”
Highland Farms Dairy, Inc. v. Agnew, 300 U.S. 608, 612 (1937);
see also Mayor of Phila. v. Educ. Equal. League, 415 U.S. 605,
615 n.13 (1974) (“The Constitution does not impose on the States
any particular plan for the distribution of governmental powers.”)
(citing Sweezy v. New Hampshire, 354 U.S. 234, 256 (1957) (Frankfurter,
(Cont'd)
lla
Appendix A
A. The Clause’s Applicability to Corporations
Chapter 190 unquestionably singles out Con Ed: the
utility is expressly named in the statute. The legislator
defendants argue, however, that the Bill of Attainder Clause
applies only to legislation that targets natural persons,
not corporations such as Con Ed. We disagree.
Although a corporation is “an artificial being, invisible,
intangible, and existing only in contemplation of law,”
Dartmouth Coll. v. Woodward, 17 U.S. (4 Wheat.) 518, 636
(1819), a wide variety of constitutional rights may be asserted
by corporations. See, e.g., Metro. Life Ins. Co. v. Ward, 470
U.S. 869, 881 n.9 (1985) (equal protection); Marshall v.
Barlow's, Inc., 436 U.S. 307 (1978) (reasonable search and
seizure); United States v. Martin Linen Supply Co., 430 U.S.
564 (1977) (double jeopardy); Va. State Bd. of Pharmacy v.
Va. Citizens Consumer Council, Inc., 425 U.S. 748 (13976)
(freedom of speech). Nevertheless, not all constitutional
protections apply to corporations or apply as fully as they do
to natural persons. See, e.g., United States v. Morton Salt
Co., 338 U.S. 632, 651-52 (1950) (privacy); Wilson v. United
States, 221 U.S. 361, 382-86 (1911) (Fifth Amendment
(Cont'd)
J., concurring)); Dreyer v. I]linois, 187 U.S. 71, 84 (1902) (“Whether
the legislative, executive and judicial powers of a state shall be kept
altogether distinct and separate . . . is for the determination of the
state.”). Indeed, where § 10 is involved, our concern for the
independent operation of each of the branches of government must
be tempered by our concern about preserving to the states the choice
of government structures. See 1 Laurence H. Tribe, American
Constitutional Law § 2-4, at 132-33 (3d ed.2000).
12a
Appendix A
privilege against self-incrimination). The distinction between
rights that may be asserted by corporations and those that
may not is that “[c]ertain ‘purely personal’ guarantees...
are unavailable to corporations and other organizations
because the ‘historic function’ of the particular guarantee has
been limited to the protection of individuals.” First Nat'l
Bank of Boston v. Bellotti, 435 U.S. 765, 778-79 n.14 (1978).
Whether a right is purely personal “depends on [its] nature,
history, and purpose.” Jd.
The applicability of the Bill of Attainder Clause to
corporations remains unsettled in every circuit. Without
directly ruling on the question, the Supreme Court has stated,
without discussion, that the Clause provides “protections for
individual persons and private groups, those who are
peculiarly vulnerable to nonjudicial determinations of guilt,”
South Carolina v. Katzenbach, 383 U.S. 301, 324 (1966)
(emphasis added). A corporation shares some of the
characteristics of a “private group,” but we need not decide
whether corporations are included within the category of
private groups because the reference to private groups plainly
contemplates protection for some entities in addition to
individual natural persons. The Court has also indicated in
dictum that a bill of attainder may target a “single individual
or firm.” Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 239
n.9 (1995) (emphasis added). No Court of Appeals has held
as much, though several have expressly assumed without
deciding that the Clause is applicable to corporations, finding
the Clause inapplicable in the particular cases for other
reasons. See Club Misty, Inc. v. Laski, 208 F.3d 615, 617
(7th Cir. 2000); Navegar, Inc. v. United States, 192 F.3d 1050,
1065 (D.C. Cir. 1999); SBC Communications, Inc. v. FCC,
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Appendix A
154 F.3d 226, 234 & n.11 (Sth Cir. 1998). For several reasons,
we think the protection afforded by the Bill of Attainder
Clauses is not a “ ‘purely personal’ guarantee[ ]” and therefore
is one of the constitutional rights enjoyed by corporations.
First, the “historical function” of the Clause has been to
ensure the procedural protections of the judicial process for
the attribution of guilt and imposition of punishment. See Nixon,
433 U.S. at 468-69; Brown, 381 U.S. at 442, 445; Lovett,
328 U.S. at 316-17; Cummings v. Missouri, 71 U.S. (4 Wall.)
277, 323 (1866). That guarantee is closely related to the right
to procedural due process. See Coniston Corp. v. Village of
Hoffman Estates, 844 F.2d 461, 468-69 (7th Cir. 1988)
(discussing the relationship between procedural due process
rights and the prohibition on bills of attainder); see also
Screws v. United States, 325 U.S. 91, 106 (1945) (stating
that “it is plain that basic to the concept of due process of
law in a criminal case is a trial — a trial in a court of law”.)
The right to procedural due process has been applied to
corporations. See, e.g., Helicopteros Nacionales de Colom.,
S.A. v. Hall, 466 U.S. 408, 413-19 (1984).°
Second, the cases in which the Court has refused to apply
constitutional rights to corporations have uniformly involved
competing state interests in regulating corporate conduct and
investigating corporate wrongdoing, which depend on a high
degree of transparency. Wilson v. United States, in which
the Court held the Fifth Amendment privilege against self-
5. Although less closely analogous, the Sixth Amendment right
to trial by jury in criminal cases has also been applied to corporations
in this Circuit. See United States v. Twentieth Century Fox Film Corp.,
882 F.2d 656, 663 (2d Cir. 1989).
14a
Appendix A
incrimination inapplicable to corporations, rested its holding
primarily on the “visitatorial power” that remains vested in
the state after it grants a corporation its charter. See 221 U.S.
at 382-84. Likewise, in United States v. Morton Salt Co.,
the Court justified its decision that corporations enjoy narrower
rights to privacy by the state’s interest in investigating corporate
wrongdoing: “law-enforcing agencies have a legitimate right
to satisfy themselves that corporate behavior is consistent
with the law and the public interest.” 338 U.S. at 652. Unlike
visitatorial powers which do not directly affect the bottom
line, punishment necessarily affects shareholder assets.
Although New York unquestionably has an interest in
investigating, regulating, and prosecuting the malfeasance
of corporations within its borders, it has no interest in inflict-
ing punishment for such malfeasance on the corporation’s
shareholders through the legislative process. Indeed, in the
instant circumstances, a “law-enforcing agency,” the PSC,
has an existing administrative procedure to vindicate the
interest in exploring utilities’ wrongdoing: the prudence
review process. That process addresses the state’s interest in
investigating and punishing utilities’ misfeasance, and to the
extent it does not do so adequately, the legislature may enact
generally applicable legislation modifying that process.
Because punishment can frequently take the form of
economic injury, a comparison with the Takings Clause of
the Fifth Amendment is apt. The protection against targeted
economic injury in the Takings Clause is fully applicable to
corporations. See, e.g., United States v. 91.90 Acres of Land,
586 F.2d 79, 85-86 (8th Cir. 1978). For both the Takings
Clause and the Bill of Attainder Clauses, if the protections
15a
Appendix A
did not extend to corporations, their protections would be
significantly undermined for individuals. When a corporation
suffers an economic injury, its shareholders suffer the same
economic injury. In order to protect shareholders from the
economic injuries prohibited by the Takings Clause and the
Bill of Attainder Clauses, corporations must be allowed to
raise the clauses directly.
We have been unable to unearth any case in which a
corporation has ultimately prevailed in challenging
legislation as a bill of attainder — cases finding a bill of
attainder targeting any party are extraordinarily rare.
Nevertheless, bills of attainder historically have targeted
corporations as well as natural persons. Con Ed cites several
English statutes that imposed disabilities on English boroughs,
hardly natural persons. See, e.g., 1 & 2 Geo. 4, c.47
(Eng. 1821). Moreover, one of the types of punishment most
frequently imposed by bills of pains and penalties, punitive
confiscation of private property, see Selective Serv. Sys. v.
Minn. Pub. Interest Research Group, 468 U.S. 841, 852
(1984), is one that may injure a corporation in the same way
it injures an individual. Cf. Browning-Ferris Indus. of Vt.,
Inc. v. Kelco Disposal, Inc., 492 U.S. 257, 284-85 (1989)
(O’Connor, J., concurring in part and dissenting in part)
(arguing that Eighth Amendment Excessive Fines Clause
applies to corporations, in part because a corporation, as an
entity, may be subject to such penalties).
We therefore hold that corporations must be considered
“individual[s],” Nixon, 433 U.S. at 468, that may not be singled
out for punishment under the Bill of Attainder Clause in
Article I, Section 10.
l6a
Appendix A
B. Retrospective Focus: Guilt
Another indispensible element of a bill of attainder is
its retrospective focus: it defines past conduct as wrongdoing
and then imposes punishment on that past conduct. See Nixon,
433 U.S. at 472-73; Cummings, 71 U.S. (4 Wall.) at 325.
Such a bill attributes guilt to the party or parties singled out
in the legislation. See Nixon, 433 U.S. at 468; De Veau v.
Braisted, 363 U.S. 144, 160 (1960) (“The distinguishing
feature of a bill of attainder is the substitution of a legislative
for a judicial determination of guilt.”); Cummings, 71 U.S.
(4 Wall.) at 323 (in enacting a bill of attainder “the legislative
body ... assumes. . . judicial magistracy; it pronounces upon
the guilt of the party, without any of the forms or safeguards
of trial”).
Although on its face Chapter 190 does not speak in terms
of guilt or innocence, we have no doubt that the legislature
considered Con Ed guilty of wrongdoing in allowing the IP2
outage to occur. The primary evidence of this is the statute’s
focus on Con Ed’s conduct related to a single, past incident,
the IP2 outage, as the basis for the sanction it imposes.
Chapter 190 makes explicit findings about the outage and
concludes that “the Consolidated Edison Company failed to
exercise reasonable care on behalf of the health, safety and
economic interests of its customers.” 2000 N.Y. Laws 190
§ 1. The legislature’s response is also limited to the IP2
incident, prohibiting Con Ed from “recovering from its
ratepayers any costs associated with replacing the power from
such facility.” 2000 N.Y. Laws 190 § 2. The statute thus
imposes liability “determined by no previous law or fixed
rule.” Lovett, 328 U.S. at 317 (internal quotation marks
17a
Appendix A
omitted). Although an established procedure existed for
determining whether Con Ed had been “imprudent” in
incurring the costs associated with the outage, the legislature
bypassed it and, in a single stroke, found guilt on the facts of
Con Ed’s case. The legislature, as the source of the PSC’s
authority, retains the power to reclaim authority over rate-
setting from the PSC. However, the decision to bypass the
PSC reinforces our conclusion that the legislature’s decision
was to find guilt and order punishment directly.
The retrospective focus of Chapter 190 is essential to
our determination that the statute is a bill of attainder.
The power of legislatures to enact purely prospective changes
to utility rates, even to the rates of a single utility, is considerably
broader than their authority to act retrospectively.
C. Punishment
To invalidate legislation as a bill of attainder, the Bill of
Attainder Clause “requires not merely ‘singling out’ but also
punishment.” Plaut, 514 U.S. at 239 n.9; accord Nixon,
433 U.S. at 471-72 & n.33 (holding that “the Act’s specificity
— the fact that it refers to appellant by name — does not auto-
matically offend the Bill of Attainder Clause”). A legislature
may legitimately create a “class of one” for many purposes,
see, e.g., Nixon, 433 U.S. at 472-73, but not for punishment.
We therefore must ascertain whether Chapter 190 punishes
Con Ed.
Punishment of wrongdoing is, of course, a legitimate
state interest reflected in the penal laws of the fifty states.
Where a statute establishing a punishment declares and
-—«*(18a
Appendix A
imposes that punishment on an identifiable party, however,
the Bill of Attainder Clauses undermine the usual solicitude
we have for such purposes. In such cases, we look beyond
simply a rational relationship of the statute to a legitimate
public purpose for “less burdensome alternatives by which
[the] legislature ... could have achieved its legitimate
nonpunitive objectives.” Nixon, 433 U.S. at 482.
Legislated punishment is not always easy to identify outside
the traditional punishments of death or incarceration. Neither
“the fact that harm is inflicted by governmental authority,”
Lovett, 328 U.S. at 324 (Frankfurter, J., concurring), nor “the
severity of [the] sanction is . . . determinative of its character
as ‘punishment,’ ” Flemming v. Nestor, 363 U.S. 603, 616 n.9
(1960). Indeed, as traditionally conceived, punishment
implicates a variety of values that, in other contexts, bear no
necessary relation to punishment. For example, a judicial order
of compensation in a negligence action imposes “harm” on the
defendant — he must pay the damage award — but that harm is
merely compensatory for the plaintiff’s injury, not punitive.
Compensation may be part of a punishment, on the other hand,
as where a criminal defendant is ordered to make restitution
to his victim. Similarly, deterrence may be a legitimate,
nonpunitive goal, such as deterrence of unreasonable conduct
produced by a damages award for negligence — but it is
also a core component of punishment. See, e.g., Brown,
381 U.S. at 458. Retribution may be one value that is limited
to the arena of punishment, but it is not a necessary part of
“punishment.” See Selective Serv. Sys., 468 U.S. at 851-52;
Brown, 381 U.S. at 458 (“It would be archaic to limit the
definition of ‘punishment’ to ‘retribution.’ ”).
19a
Appendix A
The Supreme Court articulated three factors to guide a
court’s determination of whether a statute directed at a named
or readily identifiable party is punitive: “(1) whether the
challenged statute falls within the historical meaning of
legislative punishment; (2) whether the statute, ‘viewed in
terms of the type and severity of burdens imposed, reasonably
can be said to further nonpunitive legislative purposes’;
and (3) whether the legislative record ‘evinces a [legislative]
intent to punish.’ ” Selective Serv. Sys., 468 U.S. at 852
(quoting Nixon, 433 U.S. at 473, 475-76, 478). Nixon makes
it clear that a statute need not fit all three factors to be
considered a bill of attainder; rather, those factors are the
evidence that is weighed together in resolving a bill of
attainder claim. Nixon, 433 U.S. at 473-78. The party
challenging the statute has the burden of “establish[ing] that
the legislature’s action constituted punishment and not merely
the legitimate regulation of conduct.” Jd. at 476 n.40.
Unfortunately, because the Supreme Court’s bill of attainder
jurisprudence is limited, it provides us with little guidance
for determining whether a statute is impermissibly punitive.
1. Traditional Punishments
We look first to the “infamous history of bills of attainder”
to determine whether Chapter 190 imposes the sorts of
“deprivations and disabilities so disproportionately severe
and so inappropriate to nonpunitive ends that they
unquestionably have been held to fall within the proscription
of [the Clause].” Jd. at 473. Some types of legislatively
imposed harm, in other words, are considered to be punitive
per se. The classic example is death, but others include
“imprisonment, banishment, . . . the punitive confiscation of
20a
Appendix A
property[, and prohibition of] designated individuals or
groups from participation in specified employments or
vocations.” Jd. at 473-74; accord Selective Serv. Sys.,
468 U.S. at 852.
The only traditional punishment implicated here is
punitive confiscation of property. On the one hand, Chapter
190 clearly deprived Con Ed of a property interest by
prohibiting the ordinarily permitted pass-through of costs.
All told, Chapter 190 deprives Con Ed of approximately
$250 million that it would otherwise have been able to obtain
from its customers. On the other, we are not certain that a
“deprivation” is the same thing as a “confiscation,” and indeed,
the Supreme Court has held that an adverse utility-rate
decision is not “confiscatory” for the purposes of the Takings
Clause unless it produces an overall unfair rate of return for
the utility. See Duquesne Light Co. v. Barasch, 488 U.S. 299,
307, 310, 313-14 (1989).
A statute need not fit within the historical category of
punishment to be considered such. Such a rule would render
the Clauses unable to respond to attempts by contemporary
legislatures to punish individuals in new and heretofore
unforeseen ways. See Nixon, 433 U.S. at 475. We need not
resolve this close question to conclude that Chapter 190 is
nonetheless a bill of attainder. Accordingly, we do not decide
whether Chapter 190 imposes a traditional attainder and turn
instead to the next component of the test.
2la
Appendix A
2. The “Functional” Test: Nonpunitive Statutory Goals
The second component of the Supreme Court’s test is
“functional,” looking to
whether the law under challenge, viewed in terms
of the type and severity of burdens imposed,
reasonably can be said to further nonpunitive
legislative purposes. . .. Where such legitimate
legislative purposes do not appear, it is reasonable
to conclude that punishment of individuals
disadvantaged by the enactment was the purpose
of the decisionmakers.
Id.; see also Flemming, 363 U.S. at 615 (describing “inability
to discern any alternative [nonpunitive] purpose which the
statute could be thought to serve” as a basis for finding a
statute to be punitive) (citing Zrop v. Dulles, 356 U.S. 86, 97
(1958) (plurality opinion)); Brown, 381 U.S. at 476 (White, J.,
dissenting) (“The imposition of a particularly harsh deprivation
without any discernible legitimate legislative purpose has
... been characterized as penal.’’). In doing so, we “inquire
into the existence of less burdensome alternatives by which
[the] legislature ... could have achieved its legitimate
nonpunitive objectives.” Nixon, 433 U.S. at 482. Try as we
may, we can discern no wholly non-punitive purpose to justify
the entire cost-pass-through prohibition in Chapter 190.
To be sure, part of the statute’s cost-pass-through prohibition
has an arguably non-punitive purpose. By preventing Con Ed
from passing through the costs associated with the IP2 outage
that it would not have incurred ordinarily, the legislature
iia a - 4
22a
Appendix A
prevented Con Ed’s ratepayers from being forced to bear costs
that the legislature viewed as negligently incurred. Con Ed would
be forced to compensate its ratepayers for costs passed through
prior to Chapter 190’s enactment and could not force rate-
payers to bear any further pass-throughs due to the IP2 outage.
This is not necessarily a punitive purpose. The legislature
could legitimately conclude that, as between Con Ed, the party
that caused the outage, and the ratepayers, parties having
nothing whatsoever to do with the outage, Con Ed should
bear the costs attributable to its negligence. The legislature
could decide that it would be unfair to force ratepayers to
absorb the costs of Con Ed’s error. If such a conclusion were
reached by a court in a negligence action, for instance,
no one would reasonably conclude that the court had
“punished” Con Ed.° This is a distributional fairness rationale
that has nothing inherently to do with punishment.
Nevertheless, eliminating harm to innocent third parties is
a purpose consistent with punishment. See Brown, 381 U.S.
at 458 (noting that “[a] number of English bills of attainder
were enacted for preventive purposes’). However, because
there is a clear non-punitive component to cost-allocation,
we think that, if that were all that Chapter 190 did, it would
be insufficient to justify a conclusion that the statute punishes
Con Ed.
Chapter 190 also functions to deter similar conduct by
Con Ed and other public utilities in the future. By forcing
6. Indeed, in tort, a punitive damages award would be
inappropriate for a finding of mere negligence. See W. Page Keeton
et al., Prosser and Keeton on the Law of Torts § 2, at 9-10
(Sth ed. 1984).
23a
Appendix A
Con Ed to absorb the costs of the outage, the statute
encourages Con Ed and other utilities to be more diligent
thereafter in avoiding similar outages. In this respect, Chapter
190 serves an economic-regulatory function. As a regulated
monopoly, Con Ed does not face the same incentives to
minimize costs as does an actor in a competitive market.
Indeed, that fact is the basic justification of regulation of
such monopolies: the state may act to encourage the
monopoly to minimize costs as if it were faced with
competition. See Paul A. Samuelson & William D. Nordhaus,
Economics 520-21 (12th ed. 1985). Chapter 190 can be
viewed, in part, as accomplishing that regulatory function,
enhancing economic efficiency rather than punishing Con
Ed for wrongdoing. State regulation of utilities to promote
economic efficiency is a longstanding and unquestionably
legitimate goal of state legislation. See New Orleans Pub.
Serv., Inc. v. Council of New Orleans, 491 U.S. 350, 365
(1989) (“ ‘[T]he regulation of utilities is one of the most
important of the functions traditionally associated with the
police power of the States.’ ”) (quoting Ark. Elec. Coop.
Corp. v. Ark. Pub. Serv. Comm'n, 461 U.S. 375, 377 (1983))
(alteration in original).
Chapter 190 might also deter negligent conduct with an
eye toward protecting public health; the legislative findings
in Chapter 190 focus to a considerable extent on the “potential
threats to public health and safety” from nuclear power plant
accidents. 2000 N.Y. Laws 190 § 1. All other things being
equal, this would be an ample justification for the deterrent
function of Chapter 190. However, the field of public health
and safety regulation of nuclear power generation has been
occupied by Congress through the Atomic Energy Act,
24a
Appendix A
42 U.S.C. §§ 2011 et seq., and therefore any regulation in
that area by the states is preempted. See Pac. Gas & Elec.
Co. v. State Energy Res. Conservation & Dev. Comm’n,
461 U.S. 190, 206-07, 212 (1983); Suffolk County v. Long
Island Lighting Co., 728 F.2d 52, 59-60 (2d Cir. 1984).
Consequently, we cannot consider public health and safety
as a valid, non-punitive justification for Chapter 190.
General and specific deterrence are also traditional
justifications for punishment, however. See Selective Serv.
Sys., 468 U.S. at 851-52 (“Punishment is not limited solely
to retribution for past events, but may involve deprivations
inflicted to deter future misconduct.”); 1 Wayne R. LaFave
& Austin W. Scott, Jr., Substantive Criminal Law, § 1.5(a)(1),
(4) (1986). If the entirety of the cost-pass-through prohibition
served the economic-regulatory function described above,
we might be willing to conclude that Chapter 190’s deterrent
function was non-punitive. Our view of the “type and severity
of burdens imposed,” Nixon, 433 U.S. at 475, by Chapter
190, however, leads us to a different conclusion.
Our reading of the record and statements made by counsel
at oral argument indicate that some indefinite but quite
substantial proportion of the costs that Con Ed has sought to
pass through to its ratepayers that are denied by Chapter 190
could have been passed through unchallenged if Con Ed had
installed the new generators in the ordinary course of business
at any time after they received them in 1985. To install new
generators, Con Ed must take [P2 offline for an extended
period of time. During this period, Con Ed must purchase
power on the open market to cover the lost generating
capacity at IP2. Further, Con Ed would have to pay the cost
25a
Appendix A
of labor and parts necessary to remove the old generators and
install the new ones. These costs would be incurred whenever
the generators are replaced, whether during scheduled
maintenance prior to the generators’ failure or, as here, after
that failure had occurred. Such costs are ordinary to the
business and thus may be ordinarily passed through.
Of course, there would be some differences in the costs
incurred during a scheduled outage and those incurred during
an accidental outage. The failure might cause damage to other
facility components, which would need to be repaired or
replaced. There may be some differences in the cost of labor
between a scheduled and unscheduled replacement:
for instance, Con Ed might be required to pay more overtime
to workers in the event of an unplanned outage. The cost of
power would also likely differ between the time at which a
scheduled outage could have occurred and the time at which
the accidental outage occurred. Indeed, if Con Ed had replaced
the generators during a planned outage, it presumably would
have intentionally timed the outage to coincide with a period
of reduced energy prices. The bulk of the labor and power-
replacement costs under either scenario, however, appear to
be the same.’
It is undisputed that Con Ed would have been allowed
to pass through to ratepayers the costs of covering power
demand while replacing the generators during a scheduled
outage. What, then, we must ask, other than punishment can
justify forcing Con Ed to absorb those same costs after the
7. Although the district court found this to be the case, it did
not make findings about the exact amount of these costs. 117 F. Supp.
2d at 270.
26a 7
Appendix A
accidental outage? Neither of the legitimate purposes set out
above — prevention of harm to ratepayers and deterrence of
inefficient, monopolistic conduct — can justify preventing
Con Ed from passing these costs along to ratepayers. It does
not protect ratepayers from, or compensate them for,
new unjustified costs, because those costs would have been
incurred even if Con Ed had acted as a prudent, model
corporate citizen. Nor does it deter Con Ed or other utilities
from incurring excess costs in the future: if Con Ed were
faced with precisely the same situation in the future, it might
be discouraged from delaying the installation of replacement
generators, but in acting more quickly it would incur
substantially the same costs that it now is being precluded
from passing through to its ratepayers. There is no connection
between these costs and the sort of lax monopolistic conduct
_ that utility regulation would ordinarily seek to deter.
Moreover, there are plainly “less burdensome alternatives
by which [the] legislature ... could have achieved its
legitimate nonpunitive objectives.” Nixon, 433 U.S. at 482.
The legislature easily could have tailored Chapter 190 to
exclude from the pass-through prohibition those substantial
costs that would have been incurred absent misconduct on
Con Ed’s part. For instance, it could have limited the pass-
through prohibition to the incremental cost of energy beyond
that prevailing when the replacement generators were
purchased and any costs associated with the unplanned nature
of the accidental outage such as overtime pay and damage to
other facility components. Although we do not mean to hold
that these costs need to have been identified with surgical
precision, the legislature in this case made no attempt
whatsoever to ensure that the costs imposed on Con Ed were
27a
Appendix A
proportional to the problems that the legislature could
legitimately seek to ameliorate. Rather, by lumping all costs
of the outage together and forcing Con Ed to absorb them,
the legislature piled on a burden that was obviously
disproportionate to the harm caused.
Whether a government action is punishment varies
depending on context. There may well be actions that would
be considered punitive if taken against an individual,
but not if taken against a corporation. Similarly, the govern-
ment may have more flexibility to take actions that affect
public utilities than it does when dealing with corporations
in competitive markets. We need not explore this issue further
to resolve this case, however, because Chapter 190 demonstrates
a punitive intent even though it applies to a public utility
corporation.
3. Indicia of Punitive Legislative Intent
Finally, we look to see whether the legislative history
evinces a legislative intent to punish. See Selective Serv. Sys.,
468 US. at 852 (citing Nixon, 433 U.S. at 478); Brown,
381 U.S. at 476 (White, J., dissenting). The legislative record
by itself is insufficient evidence for classifying a statute as a
bill of attainder unless the record reflects overwhelmingly a clear
legislative intent to punish. See Flemming, 363 U.S. at 617
(“[OJnly the clearest proof could suffice to establish the
unconstitutionality of a statute on [the] ground [of legislative
history.]”); see also, e.g., Lovett, 328 U.S. at 308-12
(recounting extensive evidence of punitive intent in the
legislative record). Statements by a smattering of legislators
“do not constitute [the required] unmistakable evidence of
28a
Appendix A
punitive intent.” Selective Serv. Sys., 468 U.S. at 856 n.15
(internal quotations omitted). Although the evidence of punitive
intent in the legislative record in this case is insufficient on
its own to justify a conclusion that Chapter 190 is punitive,
the legislative history does contain some explicit evidence
of punitive intent. That legislative history bolsters our prior
conclusion that a significant portion of Chapter 190’s cost-
pass-through prohibition is plainly punitive.
Our reading of the legislative history indicates that
certain legislators unquestionably intended to punish Con Ed:
there are clear references by two senators to punishment and
penalties. A sponsor of the legislation, Senator Velella, stated:
“Con Edison has done a terrible thing here. . . . And Velella’s
law is going to stop them and punish them.” A. 10096, N.Y.
Senate Debate Transcript, at 3906-07 (2000) (statement of
Sen. Velella); see also A. 10096, N.Y. Senate Debate
Transcript, at 3912 (2000) (statement of Sen. Oppenheimer)
(arguing that Con Ed “should certainly be penalized”).
The statements of a few legislators are plainly not over-
whelming evidence of penal intent, and if that were the only
evidence that the statute is punitive, we would have no trouble
holding that the statute is not a bill of attainder. But the stated
intent of at least some legislators — most notably one of the
floor managers of the legislation — to punish Con Ed
reinforces our independent conclusion that a substantial part
of the legislation cannot be justified by any legislative
purpose but punishment.
29a
Appendix A
D. Severability
Chapter 190 is not susceptible to severance of constitutional
provisions from unconstitutional provisions because it
contains only a single unitary provision. We are disinclined
to rewrite the legislation to fashion a rule that the legislature
never intended by attempting to identify and sever those costs
Con Ed may constitutionally be prevented from passing
through from the rest. In addition, because the punitive intent
of some portions of Chapter 190 is clear, we conclude that
all of Chapter 190 is a bill of attainder, absent clear evidence
that some severable section was passed without punitive intent.
Because no such evidence exists and the statute is a unitary
provision that resists severability analysis, we invalidate
Chapter 190 in its entirety.
In finding Chapter 190 to be a bill of attainder, we are
mindful of the infrequency with which this constitutional
provision has been used to strike down legislation. That rarity
is attributable to the extraordinary scarcity of legislation of
the type presented in Chapter 190. When faced with a bill
that is so exceptionally narrow in scope, manifestly
retrospective in focus, and unavoidably punitive in operation,
we cannot allow it to stand, notwithstanding the heavy
presumption of legitimacy that is ordinarily accorded
legislative decisions. In such circumstances we are reminded
of Alexander Hamilton’s reflection on the function of judicial
review in Federalist 78:
[A] limited constitution [is] one which contains certain
specified exceptions to the legislative authority; such, for
instance, as that it shall pass no bills of attainder, no ex post
30a
Appendix A
facto laws, and the like. Limitations of this kind can be
preserved in practice no other way than through the medium
of the courts of justice, whose duty it must be to declare all
acts contrary to the manifest tenor of the Constitution void.
Without this, all the reservations of particular rights or
privileges would amount to nothing.
The Federalist No. 78, at 466 (Hamilton) (Clinton Rossiter,
ed., 1961) (italics removed).
II. Scrivener’s Error in the Judgment
Although we affirm, we must remand to the district court
with direction to correct the obvious scrivener’s error on its
judgment form, indicating that “the case is DISMISSED in
its ENTIRETY, in favor of the Plaintiff and against the
Defendants; and it is FURTHER ORDERED, that the
plaintiff’s motion for a permanent injunction is GRANTED.”
Cf. United States v. Latorre-Benavides, 241 F.3d 262, 264
(2d Cir.) (per curiam) (affirming but remanding to correct
typographical error in judgment), cert. denied, 532 U.S. 1045
(2001).
CONCLUSION
For the foregoing reasons, the judgment of the district
court is hereby affirmed. The case is remanded to the district
court to conform the judgment to the substance of the district
court’s disposition. The district court shall strike the words
“the case is DISMISSED in its ENTIRETY, in favor of the
Plaintiff ...” and replace them with “JUDGMENT is
GRANTED, in favor of the Plaintiff. . .” Costs are awarded
to the Plaintiff-Appellee.
3la
APPENDIX B — MEMORANDUM — DECISION AND
ORDER OF THE UNITED STATES DISTRICT
COURT FOR THE NORTHERN DISTRICT OF
NEW YORK DATED AND FILED OCTOBER 10, 2000
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
00-CV-1230
CONSOLIDATED EDISON COMPANY OF
NEW YORK, INC.,
Plaintiff,
VS.
GEORGE E. PATAKI, in his official Capacity as Governor
of the State of New York, MAUREEN O. HELMER, in her
official capacity as Chairman of the New York State Public
Service Commission, THOMAS J. DUNLEAVY, JAMES D.
BENNETT, LEONARD WEISS and NEAL N. GALVIN
in their official capacities as Commissioners of the New York
State Public Service Commission,
Defendants,
SHELDON SILVER, Speaker of the New York State
Assembly, and RICHARD L. BRODSKY, Member of the
New York State Assembly,
Intervenor-Defendants.
MEMORANDUM — DECISION AND ORDER
32a
Appendix B
Presently before the Court is Plaintiff’s motion for a
preliminary and permanent injunction enjoining enforcement
of Chapter 190 of the Laws of 2000.' For the reasons set
forth below, Plaintiff’s motion for a permanent injunction is
GRANTED and its motion for a preliminary injunction is
DENIED as moot.
I. Background
A. Indian Point Nuclear Power Plant
In 1972, Plaintiff purchased Model 44 steam generators
from Westinghouse and installed them in its Indian Point 2
Nuclear Plant. In the mid to late 1970’s, Westinghouse
discovered that the metal alloy used to make the steam
generator tubes in Model 44 and Model 51 steam generators
was susceptible to corrosion. Approximately 30 nuclear
1. In relevant part, the law states:
By continuing to operate steam generators known to be
defective, and thereby increasing the risk of a radio-
active release and/or an expensive plant outage,
the Consolidated Edison Company failed to exercise
reasonable care . . . Therefore it would not be in the
public interest for the company to recover from
ratepayers any costs resulting from the February 15, 2000
outage at the Indian Point 2 Nuclear Facility. . . . [T]he
New York State public service commission shall prohibit
the Consolidated Edison Company from recovering from
its ratepayers any costs associated with replacing the
power from such facility . . . [SJuch prohibition shall
apply to the automatic adjustment mechanisms as well
as base rates or any other recovery mechanism.
33a
Appendix B
plants in the United States were using these two types of
generators at the time of this discovery. By January 1, 1997,
13 plants had replaced the defective generators, 16 had not,
and one plant had ceased operation. Plaintiff did not replace
its generators because of its mistaken belief that they could
safely remain in operation for many more years.
On February 15, 2000, one of the tubes located in the
Model 44 generators in the Indian Point Plant suffered a
2-inch tear that allowed radioactive fluid to leak through a
tube wall and mix with water and steam in one of the steam
generators. The Indian Point Plant was shut down pending
review of the incident by the Nuclear Regulatory
Commission. In the interim, Plaintiff has decided to replace
the existing model 44 generators with replacement generators
purchased in 1988. Until these replacement generators are
in place, Plaintiff will have to purchase power from other
utilities to replace the power lost due to the Indian Point
Plant’s inability to operate. These replacement costs will cost
Plaintiff between $165 million and $200 million.
B. New York Regulatory Framework
New York law allows the New York Public Service
Commission (“PSC”) to set energy rates that Plaintiff charges
to its retail customers. These rates are set pursuant to the
terms of a five-year Settlement Agreement approved by the
PSC in 1997. Under the Agreement’s terms, variations in
costs Plaintiff incurs each month as it generates or purchases
power can be passed onto its customers. The mechanism
allowing this to occur is known as a Fuel Adjustment Clause
(“FAC”) (now called a Monthly Adjustment Charge).
34a
Appendix B
PSC practice codified by state statute enables the PSC
to retroactively adjust monthly utility rates charged to
Plaintiff’s customers (following a hearing) if the PSC
determines that a utility like Plaintiff collected unreasonable
charges under the FAC. When Plaintiff began reflecting the
costs of Indian Point replacement power purchases in the
FAC, the PSC commenced a proceeding to review the
reasonableness of those charges. Had this proceeding
determined that Plaintiff acted negligently in failing to replace
the generators at Indian Point, the PSC would have ordered
it to refund to its customers all costs associated with
purchasing Indian Point replacement power.
C. The Indian Point Law
The New York State Assembly drafted Chapter 190 of the
Laws of 2000 (“Indian Point Law” or “Chapter 190” or the
“Bill”) following the PSC’s determination not to immediately
suspend operation of Plaintiff’s use of the FAC. The Law,
approved by both the Assembly and the New York State
Senate and signed by Governor Pataki, nullified the already
commenced PSC review process by directly ordering it to
prohibit Plaintiff from recovering from its ratepayers any
costs associated with replacing power from the February 15,
2000 outage at the Indian Point Plant. The basis for this law
is the legislative finding that “[b]y continuing to operate
steam generators known to be defective . . . the Consolidated
Edison Company failed to exercise reasonable care on behalf
of the health, safety and economic interests of its customers.”
Plaintiff has asked this Court for a preliminary and
permanent injunction enjoining enforcement of the Indian
35a
Appendix B
Point Law. Furthermore, Plaintiff has asked this Court to
declare the Indian Point Law violative of (1) the Equal
Protection Clause of the 14th Amendment; (2) the Procedural
Due Process requirements of the 14th Amendment; (3) the
Supremacy Clause; (4) the Contracts Clause contained in
Article 1, § 10; and (5) the Prohibition on Bill of Attainder
also contained in Article 1, § 10.
II. Equal Protection
A. Standard
The Equal Protection Clause of the Fourteenth Amendment
provides that “no State shall . . . deny to any person within
its jurisdiction the equal protection of the laws.” U.S. Const.
amend. XIV, § 15. The clause “‘is essentially a direction
that all persons similarly situated should be treated alike.”
City of Cleburne v. Cleburne Living Center, 473 U.S. 432,
439 (1985) (citing Plyer v. Doe, 457 U.S. 202, 216 (1982)).
Legislation that does not restrict a fundamental right or
employ a suspect classification, like the social and economic
legislation at issue in this case, is presumed valid as long as
it is rationally related to a legitimate government interest.
See Cleburne Living Center, 473 U.S. at 440; Romer v. Evans,
517 U.S. 620, 631 (1996).
This presumption of validity is buttressed by the notion
that governments are entitled to wide deference when enacting
social and economic legislation government. See Cleburne
Living Center, 473 U.S. at 439. It is not the job of a federal
court to ascertain the wisdom of a challenged statute or the
utility of a questioned law. See id.; Minnesota v. Clover Leaf
36a
Appendix B
Creamery Co., 449 U.S. 456, 469 (1981). This does not mean
that this Court is stripped of its power to substantively review
the legitimacy of social and economic legislation. See, e.g.,
Dep t of Agriculture v. Moreno, 413 U.S. 528, 532 (1973)
(striking down a state statute which limited receipt of food
stamps to households of related individuals while excluding
households containing unrelated individuals as not rationally
related to the stated purposes of the Food Stamp Act);
see generally Zobel v. Williams, 457 U.S. 55 (1982).
Rather, this Court must ascertain whether any set of facts
exist that may reasonably justify the challenged law.
See McGowan v. Maryland, 366 U.S. 420, 425-426 (1961).
If this Court determines that a reasonable justification for
the law exists, it is required to uphold it. See, e.g., Vacco v.
Quill, 521 U.S. 793, 807 (1997) (finding a reasonable
justification to warrant classifying terminally ill patients who
refuse medical treatment differently from patients who wish
to engage in physician assisted suicide). Conversely, if this
Court determines that the legislature acted arbitrarily or
classified Plaintiff upon some ground not having a fair and
substantial relation to the object of the act, such that similarly
situated persons are treated differently, it must strike down
the statute. See Reed v. Reed, 404 U.S. 71, 76 (1971);
see also, F.S. Royster Guano Co. v. Virginia, 253 U.S. 412,
415 (1920).
Defendants’ lawyers contend that the legislature’s
determination to create a statute directed at Plaintiff is simply
a response to its continued use of Westinghouse Model 44
steam generators. According to them, because Plaintiff is the
only nuclear operator in New York using such generators,
37a
Appendix B
it is impossible for any other utility to pass similar costs to
its ratepayers. Therefore, the legislature rationally determined
that Plaintiff is a legitimate class of one.
Although this Court recognizes that after-the-fact
rationalizations of statutory classifications by lawyers and
judges may serve to uphold the validity of a challenged
statute, see McDonald v. Board of Education, 394 U.S. 802,
809 (1969), this rationalization makes little sense when
examined in light of the express legislative findings
accompanying the statute. According to these findings, “the
Con-Edison Company failed to exercise reasonable care on
behalf of the health, safety and economic interests of its
customers.” Therefore, the legislature concluded, “it would
not be in the public interest for the company to recover from
ratepayers any costs resulting from the” Indian Point outage.
Hence, the Indian Point Law was not passed simply as a
response to Plaintiff’s continued use of Model 44 generators.
Instead, it was passed in response to Plaintiff’s failure to
exercise reasonable care on behalf of the health, safety, and
economic interests of its customers. As such, this Court must
determine 1) whether any legitimate state interest underlies
this finding and 2) if the classification of Plaintiff is rationally
related to any such legitimate state interest.
B. Legitimate State Interest
To determine the legitimacy of a state interest, this Court
should begin its inquiry by examining the statute itself and
its legislative history. See Johnson v. Robinson, 415 U.S. 361,
376 (1974). As long as the purposes of the statute can be
38a
Appendix B
easily ascertained from these sources, this Court should limit
its inquiry to them. See id. If these purposes do not offend
specific constitutional prohibitions, “when the legislature has
spoken, the public interest has been declared in terms well-
nigh conclusive.” Hawaii Housing Authority v. Midkiff,
467 U.S. 229, 238 (1984) (quoting Berman v. Parker,
348 U.S. 26, 32 (1984)).
The stated purposes of the Indian Point Law are found
in Section 1 of the statute and the accompanying
memorandum in support of the law. According to Section 1
of the statute, it is not in the public interest for the company
to recover from ratepayers any costs resulting from Plaintiff’s
failure to exercise reasonable care on behalf of its customers.
The memorandum in support of the law declares that the
purpose of the bill is to “protect ratepayers from costs related
to imprudence by Con-Edison Company (Con-Edison) in
relation to a recent radiation leak at the Indian Point 2 Nuclear
Facility.”
This Court does not dispute the legitimacy of the State’s
laudable desire to deter negligence at nuclear power plants,
protect rate payers, and regulate utility rates. See Duquesne
Light Co. v. Barasch, 488 U.S. 299 (1989). What this Court
does view as problematic is the completely irrational manner
in which the statute classifies Plaintiff in an effort to further
these purposes.
C. Rational Relation of Legislature’s Classification
A classification is rationally related to a legitimate
government interest as long as it does not place persons into
“different classes on the basis of criteria wholly unrelated to
ee ee ee ee
39a
Appendix B
the objective of the state.” Reed, 404 U.S. at 76. As long as
the classification is “reasonable, not arbitrary, and [rests]
upon some ground of difference having a fair and substantial
relation to the object of the legislation, so that all persons
similarly circumstanced shall be treated alike,” this Court
will uphold it. Jd. (quoting FS. Royster Guano Co., 253 U.S.
at 415.) However, as this Court has stated, if the classification
is “so under-inclusive” that it bears no relation to the statute’s
purpose, the Court will strike it down. Long Island Lighting
Co. v. Cuomo, 666 F.Supp. 370, 423 (N.D.N.Y. 1987).
In the instant case, the Court notes that the Indian Point
Law singles out Plaintiff with unparalleled specificity and
forbids it from recovering any costs associated from the
Indian Point 2 shut-down. While it may be true that Plaintiff
should not recover costs associated from the Indian Point 2
shut down, the Court fails to see how Plaintiff's allegedly
negligent action here justifies the creation of a statutory class
aimed directly at it. In particular, the Court sees absolutely
no difference between the allegedly negligent conduct at issue
in this case and any other case of nuclear power plant
negligence normally brought before the PSC.
For example, had the New York State Electric and Gas
Corporation engaged in negligent operation of its Nine Mile
Point 2 nuclear power plant, it would have been entitled to
pass replacement costs onto its customers until the PSC made
a determination that the costs were incurred because of
imprudence. Further, such a determination would be
reviewable pursuant to Article 78 of the CPLR in the state
courts. Yet, according to Defendants, Plaintiff was denied
this same exact right because its negligence involved the use
40a
Appendix B
of a specific model of generator. In essence, Defendants want
this Court to accept the premise that because only Plaintiff
could be negligent as to these specific model generators it
did not have to draft a statute that applied to other similarly
situated nuclear power plant operators.
This Court rejected this argument long ago. Writing in
Long Island Lighting Co., Chief Judge Munson stated:
The fact that the terms of a statute, if drafted in
such a way that it applied to all like-situated
individuals, would in the legislature’s estimation
actually affect only one of those individuals does
not justify drafting the statute in such a way that
it applies only to that individual and not to the
others who are similarly situated. This is akin to
a small community, believing that one particular
individual is prone to steal automobiles, passing
an ordinance prohibiting that individual from
stealing automobiles but not imposing a similar
prohibition on all others in the community.
Clearly, such an ordinance would offend the
“element of neutrality that must always characterize
the performance of the sovereign’s duty to govern
impartially.”
Id. at 424 (citations omitted). Consequently, this Court
concludes that the classification of Plaintiff based upon its
use of Model 44 generator is arbitrary, does not rest upon
some ground of difference fairly and substantially related to
the object of the statute, and treats similarly situated nuclear
power plant operators differently.
4la
Appendix B
Moreover, this Court notes that there is some evidence
to indicate that the articulated purpose underlying this
arbitrary classification is a mere pretext for an impermissible
purpose offending other constitutional provisions. In particular,
this Court notes that the legislative record is replete with
references that the Indian Point Law was passed to punish
Plaintiff for its negligence and existing high rates.? If this
legislative classification was upheld on the ground that
punishing Plaintiff was rationally related to the statute’s
purposes, it would violate the most basic tenet of the Equal
Protection Clause.
As the Supreme Court has emphatically stated, “if the
constitutional conception of ‘equal protection of the laws’
means anything, it must at the very least mean that a bare
congressional desire to harm a politically unpopular group
cannot constitute a legitimate government interest.” United
States Department of Agriculture v. Moreno, 413 U.S. at 534.
New York State’s legislature is not free to “pick and choose
only a few to whom they will apply legislation and thus [ ]
escape the political retribution that might be visited upon
them if larger numbers were affected.” Laurence Tribe,
American Constitutional Law 998 (1978) (quoting Railway
Express Agency, Inc. v. New York, 336 U.S. 106, 116 (1949)).
For these reasons, the Indian Point Law violates the Equal
Protection Clause of the Fourteenth Amendment of the
Constitution.
This Court has no doubt that if the New York State
Legislature passes a law creating a higher standard of care
2. The punitive purpose of Chapter 190 is discussed below in
Part III. B.
ee
42a
Appendix B
for operators of nuclear plants in comparison to other types of
energy plants that applies to all similarly situated nuclear plant
operators, it would pass constitutional muster. Moreover,
this Court has no doubt that if the PSC ultimately determines
that Plaintiff acted negligently in failing to replace the generators
at Indian Point 2 and orders Plaintiff to refund all replacement
costs to its customers, that too would pass constitutional muster.
Unfortunately, neither of these two avenues were taken,
leaving this Court no choice but to strike down the Indian
Point law as violative of the Equal Protection Clause.
III. Bill of Attainder
Plaintiff also argues that the Indian Point Law violates
the Constitutional Prohibition against passing any bill of
attainder. Article I, Section 10 of the Constitution provides
that “[n]o State shall ... pass any bill of attainder.”’
An unlawful bill of attainder is any law “that legislatively
determines guilt and inflicts punishment upon an identifiable
individual without provision of the protections of a judicial
trial.” Nixon v. Administrator of Gen. Servs., 433 U.S. 425,
468 (1977).
Historically, the bill of attainder was a parliamentary
device used in sixteenth, seventeenth and eighteenth century
England to sentence to death one or more specified persons
for attempting or threatening to attempt to overthrow the
government. See United States v. Brown, 381 U.S. 437, 441
(1965). However, the Supreme Court has held that:
3. Article I, Section 9, applicable to Congress, states that
“{n]o Bill of Attainder or ex post facto Law shall be passed.” Section 10
applies the same rule to the States.
43a
Appendix B
the Bill of Attainder Clause was intended not as
a narrow, technical (and therefore soon to be
outmoded) prohibition, but rather as an imple-
mentation of the separation of powers, a general
safeguard against legislative exercise of the
judicial function, or more simply — trial by
legislature.
United States v. Brown, 381 U.S. at 442. The Brown Court
went on to hold that “(t]he Bill of Attainder Clause not only
was intended as one implementation of the general principle
of fractionalized power, but also reflected the Framers’ belief
that the Legislative Branch is not so well suited as politically
independent judges and juries to the task of ruling upon the
blameworthiness of, and levying appropriate punishment
upon, specific persons.”* Brown, 381 U.S. at 445; see also
McMullen v. United States, 989 F.2d 603, 607 (2d Cir. 1993).
The Court’s opinion and the Clause’s important purpose
are borne out in the writings of the Framers themselves. James
Madison wrote:
The accumulation of all powers, legislative,
executive, and judiciary, in the same hands, whether
of one, a few, or many, and whether hereditary,
4. Although the Supreme Court has not explicitly held so, it
has stated in dicta that the Bill of Attainder Clause applies to corporate
entities as well as to individuals. Plaut v. Spendthrift Farm, Inc.,
514 U.S. 211, 239 n.9 (1995). It is this Court’s opinion that such an
interpretation, although not explicitly adopted by the Supreme Court,
is correct given the broad intent of the Clause and it is, accordingly,
adopted.
44a
Appendix B
self-appointed, or elective, may justly be pronounced
the very definition of tyranny.
The Federalist, No. 47, at 373-74 (Hamilton ed. 1880).
The Brown court also cited the writings of Madison and
Alexander Hamilton in finding that:
[t]he authors of the Federalist Papers took the
position that although under some systems of
government (most notably the one from which the
United States had just broken), the Executive
Department is the branch most likely to forget the
bounds of its authority, in a representative republic
where the legislative power is exercised by an
assembly which is sufficiently numerous to feel
all the passions which actuate a multitude; yet not
so numerous as to be incapable of pursuing the
objects of its passions, barriers had to be erected
to ensure that the legislature would not overstep
the bounds of its authority and perform the
functions of the other departments.
Brown, 381 U.S. at 443-44 (quotations omitted) (citing
generally The Federalist, Nos. 47 (Madison), 48 (Madison),
49 (Hamilton), 51 (Hamilton) and 78 (Hamilton)). Madison
also stated that “[b]ills of attainder . . . are contrary to the
first principles of the social compact and to every principle
of sound legislation,” The Federalist, No. 44, at 282, and,
quoting Montesquieu, wrote that “were the power of judging
joined with the legislative, the life and liberty of the subject
would be exposed to arbitrary control, for the judge would
then be the legislature,” The Federalist, No. 47, at 303.
45a
Appendix B
Additionally, the Brown Court observed that a legislative
body, which is by its very nature dependent upon the people,
is rendered “liable to be peculiarly susceptible to popular
clamor” and is “not properly constituted” to take such actions.
Brown, 381 U.S. at 445 (quoting 1 Cooley, Constitutional
Limitations, pp. 536-37 (8th ed. 1927)). With this fear in
mind, the Court held, the Framers banned bills of attainder
in order to limit legislatures “to the task of rulemaking.” Jd.
at 446. Hence, the Supreme Court has always recognized the
Bill of Attainder Clause as an important piece of the |
constitutional framework ensuring the separation of powers,
one of our nation’s most deeply imbedded principles.
See, e.g., Fletcher v. Peck, 10 U.S. 87, 138 (1810)
(Chief Marshall holding that “[i]t is the peculiar province of
the legislature to prescribe general rules for the government
of society; the application of those rules to individuals in
society would seem to be the duty of other departments”);
Plaut, 514 U.S. at 242 (noting that “the Constitution’s
‘separation-of-powers’ principles reflect, in part, the Framers’
concern that a legislature should not be able unilaterally to
impose a substantial deprivation on one person” and that
this principle was expressed “both in specific provisions,
such as the Bill of Attainder Clause, and in the Constitution’s
general allocation of power’’) (citations omitted). It is with these
principles in mind that the Court will apply the Bill of
Attainder Clause to the facts of this case.
A. Standard
It is well established that, in order to determine whether
a legislative enactment is an unlawful bill of attainder,
the Court must determine whether the challenged law inflicts
46a
Appendix B
punishment on specifically designated individuals or entities
without the benefit of judicial trial. See Brown, 381 U.S.
at 448-49 (citing United States v. Lovett, 328 U.S. 303,
315-16 (1946)). In other words, a law is a bill of attainder if
it satisfies “a three-pronged conjunctive test that considers
whether the act: (1) imposed punishment, (2) specified the
persons, and (3) lacked the protection of judicial process.”
McMullen, 989 F.2d at 611 (citing Selective Serv. Sys. v.
Minnesota Pub. Interest Research Group, 468 U.S. 841, 847
(1984)).
Chapter 190 clearly satisfies the second and third prongs
of this test. The specificity prong is satisfied if “the
challenged act singles out a person or identifiable group either
by name or by describing those affected by the act ‘in terms
of conduct which, because it is past conduct, operates only
as a designation of particular persons.’ ” Long Island Lighting
Co., 666 F.Supp. at 403 (quoting Communist Party of United
States v. Subversive Activities Control Bd., 367 U.S. 1, 86
(1961)). Chapter 190 takes the extraordinary step of naming
Plaintiff as the solitary target of the legislation. Consequently,
there is no doubt that the Indian Point Law satisfies the
specificity prong of the bill of attainder test.
Likewise, it is clear that Plaintiff was not accorded
judicial process in this case. Quite the contrary, Chapter 190
was passed following the ordinary legislative process.
Plaintiff was given no judicial or quasi-judicial protections
to fight the legislature’s determination that it “failed to
exercise due care” in failing to replace the generators at Indian
Point 2.
47a
Appendix B
B. Punishment
The harder question for the Court is whether the Indian
Point Law inflicts “punishment.” This is a fact-specific
inquiry, McMullen, 989 F.2d at 612, and each case must turn
“ ‘on its own highly particularized context,’ ” Selective
Service, 468 U.S. at 852 (quoting Flemming v. Nestor,
363 U.S. 603, 616 (1960)). The Supreme Court has developed
a series of tests to be used in determining whether the
legislative enactment in question inflicts “punishment.”
Courts must consider: “(1) whether the challenged statute
falls within the historical meaning of legislative punishment;
(2) whether the statute, ‘viewed in terms of the type and
severity of burdens imposed, reasonably can be said to further
nonpunitive legislative purposes’; and (3) whether the
legislative record ‘evinces a congressional intent to punish.’ ”
Selective Service, 468 U.S. at 852 (quoting Nixon, 433 U.S.
at 475-76); see McMullen, 989 F.2d at 612. These tests are
referred to as the “historical,” “functional” and “motivational”
tests, respectively. See id. Although it need not do so in order
to be found violative of the Bill of Attainder Clause, Chapter
190 satisfies all three of these tests.
1. Historical Test
The “historical” test asks whether the enactment imposes
a punishment “traditionally judged to be prohibited by the
Bill of Attainder Clause.” Nixon, 433 U.S. at 475. Among
those forms of punishment traditionally prohibited are
imprisonment, banishment, execution, punitive confiscation
of property and bars against participation in specified
employments or vocations. See id.
48a
Appendix B
In Long Island Lighting Co., this Court observed that
the Bill of Attainder Clause:
has been applied only to legislation closely parallel-
ing the historical characteristics of common law
bills of attainder and bills of pains and penalties,
the most important of which is a design “to
inflict[ ] its deprivation upon the members of a
political group thought to present a threat to
national security.”
Long Island Lighting Co., 666 F.Supp. at 403 (quoting Brown,
381 U.S. at 453). In that case, the plaintiff, in circumstances
similar to those found here, claimed that acts passed by the
New York State Legislature “imposed economic disabilities
and deprivations” on it, constituting “punitive confiscation”
of its property interests. Jd. at 404. The Court rejected the
plaintiff’s arguments because the acts provided for just
compensation for any property lost and, “most importantly”,
because the challenged acts were “not ‘[g]enerally addressed
to persons considered disloyal to the Crown or State.’ ”
Id. (quoting Brown, 381 U.S. at 474).
In this case, defendant PSC has estimated the total costs
of the sanction imposed on Plaintiff at $162 million through
August 31, 2000. As new steam generators will not be
installed for at least a few more months, this number could
eventually be much larger. Plaintiff is not offered any
compensation under the terms of Chapter 190. Moreover, as
discussed below, the Court finds that these sanctions were
imposed for punitive purposes by the legislature. Accordingly,
Chapter 190 certainly imposes “punitive confiscation of
property” on Plaintiff.
49a
Appendix B
Plaintiff, of course, cannot argue that it is a “political
group thought to present a threat to national security.” Brown,
381 U.S. at 453. However, to suggest that, in order to fall
within the traditional prohibitions of the Bill of Attainder
Clause, an act must punish only members of such a class is
far too cramped a reading of the standards established by the
Supreme Court. Indeed, it has been noted that “[t]he concept
of punishment under the bill of attainder clause has always
been a fairly broad one.” Laurence Tribe, American
Constitutional Law § 10-4, at 642 n.9 (2d ed. 1988).
As discussed above, it is well established that the Bill of
Attainder Clause is not to be construed narrowly, but rather
as an important tool in assuring the separation of powers.
See Brown, 381 U.S. at 442. The Framers were concerned
with occasions on which the legislature could take advantage
of the existing political landscape to usurp the functions of
its fellow branches, not just those in which the subject of the
legislation is considered a threat to the State. Considering
this goal, the Clause’s historical scope properly includes
actions against any person or persons who are so unpopular
politically that the legislature may take unilateral action
against them without fear of political retribution. This is not
to say that any legislation imposing limitations or restrictions
on individuals or entities is suspect. Such a construction of
the Bill of Attainder Clause would paralyze legislative
activity. Instead, the confiscation in question must be punitive
in nature, as is the case here.
Plaintiff, a powerful utility, although not the prototypical
powerless victim of constitutional overreaching by any
stretch of the imagination, is clearly politically unpopular.
50a
Appendix B
This is particularly so when it is accused of exposing the
public to the risk of nuclear leaks and of unjustly passing
along millions of dollars in resultant costs to the rate payers.
Indeed, this was not lost on the legislature, as one Senator
proclaimed during debate of the bill that it made for “great
politics” but “horrible policy.” Accordingly, it fits nicely into
the class of persons traditionally protected from bills of
attainder.
2. Functional Test
Even if Chapter 190 does not satisfy the “historical” test,
the Supreme Court has “ ‘emphatically rejected the argument
that the [Bill of Attainder Clause] outlawed only a certain
class of legislatively imposed penalties.’ ” McMullen,
989 F.2d at 607 (quoting Brown, 381 U.S. at 447-48).
In Nixon, the Court held that it had not “precluded the
possibility that new burdens and deprivations might be
legislatively fashioned that are inconsistent with the bill of
attainder guarantee.” Nixon, 433 U.S. at 475. Accordingly,
the Court “often has looked beyond mere historical
experience and has applied a functional test of the existence
of punishment, analyzing whether the law under challenge,
viewed in terms of the type and severity of burdens imposed,
reasonably can be said to further nonpunitive legislative
purposes.” Jd. at 475-76. Upon review of the stated purpose
of Chapter 190, the sanctions it actually imposes, and the
circumstances surrounding its enactment, the Court finds that
it cannot reasonably be said to further nonpunitive goals.
To the contrary, it is apparent that the purpose of Chapter 190
is to punish Plaintiff for its actions.
Sla
Appendix B
As discussed above, the statute’s stated purpose is to
“protect ratepayers from costs related to imprudence by”
Plaintiff in relation to the leak at Indian Point. Although, on
its face, such a purpose does not appear punitive, a number
of important factors indicate that the legislature was indeed
intent on punishing Plaintiff for its prior actions.
First and foremost, this Court’s conclusion that the
legislature’s “class of one” is not rationally related to the
stated purpose of the bill makes it suspect under the Bill of
Attainder Clause. Although not determinative of the issue,
the legislature’s explicit naming of one entity to suffer the
sanctions Chapter 190 inflicts, when that classification is not
rational, bespeaks an intent to punish the named entity.
As Justice Kennedy stated in his Nixon concurrence,
“the very specificity of the statute would mark it is punish-
ment, for there is rarely any valid reason for such narrow
legislation; and normally the Constitution requires
[legislatures] to proceed by general rulemaking rather than
deciding individual cases.” Nixon, 433 U.S. at 485-86.
In Nixon, the Supreme Court held that “(ijn determining
whether a legislature sought to inflict punishment on an
individual, it is often useful to inquire into the existence of less
burdensome alternatives by which that legislature . . . could have
achieved its legitimate nonpunitive objectives.” Jd. at 482. In
this case, the legislature had a readily available alternative that
would have achieved the same goal in a considerably less
burdensome fashion. The existing regulatory framework would
have prevented Plaintiff from passing costs resulting from
“imprudent” actions onto its customers. Indeed, the PSC had
already begun proceedings to review the prudency of the charges
surrounding the leak at Indian Point.
52a
Appendix B
Again, this reality was not lost on the legislature. One
senator argued during debate of the bill that the legislature
was making its determination without following “old fact
gathering procedures [it] generally” uses and that it was
performing those functions which it had “hired judges to do.”
Moreover, the Chairman of the PSC, defendant Maureen
Helmer, wrote to the sponsors of the bill making clear that
the PSC was in the process of performing a prudency review.
The letter also warned the legislators of the constitutional
infirmity of the proposed bill. In spite of this, the legislature
took upon itself the role of adjudicator and eschewed the
less burdensome alternative of a quasi-judicial determination
by the PSC followed by review in the courts.
The language used by senators in debating Chapter 190
also strongly suggests a punitive intent in its passage. It is
clear from the record that the legislature made particularized
findings of fact that Plaintiff engaged in blameworthy actions
in the past-and proceeded to institute appropriate sanctions.
The sponsors and other legislators used language such as
“punish” and “penalize” and “has done a terrible thing here.”
5. For e,~ample, during Senate debates on Chapter 190 Senator
Velella declared:
Con Edison has done a terrible thing here. They have negligently
performed their function as a utility company. They failed to install
a generator that was given to them, to replace a defective one. And
they put lives at risk. Now, nobody wants to come in and swear to
the fact, yes we did that. I doubt very seriously if anybody from Con
Ed ever will swear to the fact that they did it. But they did it. And
Velella’s law is going to stop them and punish them.
53a
Appendix B
Further, the Supreme Court has found that “[i]t would
be archaic to limit the definition of ‘punishment’ to ‘retribution.’
Punishment serves several purposes; retributive, rehabili-
tative, deterrent — and preventive.” Brown, 381 U.S. at 458.
Here, Chapter 190 itself provides that its effect will be to
“discourage [nuclear operators from] risking public health
and safety.” That the legislature took this action against a
single entity to deter future similar action is unmistakable
evidence of punitive intent. As discussed this legislative
intent is commendable. A general rule effecting such an intent
by proscribing greater penalties for such actions, as are
alleged here, would almost certainly pass constitutional
muster. However, the legislature did not do this. Instead it
levied punishment against a single entity and in the process
subsumed the powers of all three branches of government.
Finally, it is critical to note that counsel for defendant
PSC acknowledged at oral argument that, had Plaintiff
replaced the Westinghouse generators in 1988, the costs
would probably have been passed onto the ratepayers with
no interference from the PSC. Many of the same costs
resulting from the recent leak would have been incurred if
the generator had been replaced in 1988. Moreover, purchased
power costs during planned refueling and maintenance
outages, even when they coincide with imprudently caused
outages, are recoverable by the utility. That Plaintiff is not
aliowed to recover these costs by Chapter 190, makes it clear
that the legislature is acting to punish Plaintiff for what was
deemed to be its blameworthy conduct in continuing to
operate with the Westinghouse generators.
54a
Appendix B
3. Motivational Test
Finally, under the “motivational” test, the Court must
ascertain “whether the legislative record evinces a congressional
intent to punish.” Nixon, 433 U.S. at 478. As discussed above,
the legislative record and all of the circumstances surrounding
Chapter 190’s enactment make it clear that the New York
State Legislature was acting with the intent of punishing
Con Edison.
In the final analysis, it is apparent to the Court that
Chapter 190 constitutes exactly the kind of legislative action
that the Bill of Attainder Clause was drafted to prevent.
Having determined that a politically unpopular entity may
have acted wrongfully, rather than setting “forth a generally
applicable rule . . . and leave to the courts and juries the job
of deciding what [entities] have committed the specified acts
or possess the specified characteristics,” the legislature took
it upon itself to determine the entity’s guilt and to impose
the sanction it deemed appropriate. Brown, 381 U.S. 437. In
short, the legislature “was intent on encroaching on the
judicial function of punishing an individual for blameworthy
offenses.” Nixon, 433 U.S. at 479. Consequently, the Court
finds that the Indian Point Law violates the constitutional
prohibition against enacting a bill of attainder.° As the Court
has determined that it is violative of the Equal Protection
6. Because this Court determined that the Indian Point Law is
unconstitutional on equal protection and bill of attainder grounds,
it will not address Plaintiff’s other constitutional claims. Furthermore,
because the Court has granted a permanent injunction, Plaintiff’s
motion for a preliminary injunction is denied as moot.
55a
Appendix B
Clause and the Bill of Attainder Clause, Defendants are
enjoined from taking any action to implement or enforce
Chapter 190.
IV. Conclusion
Accordingly, it is hereby
ORDERED that Plaintiff’s motion for a permanent
injunction is GRANTED; it is further
ORDERED that Defendants are enjoined from taking any
action to implement or enforce Chapter 190 of the Laws of
2000; it is further
ORDERED that Plaintiff’s motion for a preliminary
injunction is DENIED as moot; and it is further
ORDERED that the Clerk shall serve copies of this Order
by United States Mail upon the attorneys for the parties
appearing in this action.
IT IS SO ORDERED.
s/ Hon. Lawrence E. Kahn
Hon. Lawrence E. Kahn
United States District Judge
Dated: October 10, 2000
Albany, New York
56a
APPENDIX C — AMENDED JUDGMENT OF THE
UNITED STATES DISTRICT COURT FOR
THE NORTHERN DISTRICT OF NEW YORK
DATED JULY 2, 2002
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
DOCKET NO. 1:00-CV-1230 (LEK/RWS)
CONSOLIDATED EDISON COMPANY OF
NEW YORK, INC., >
Plaintiff,
V.
GEORGE E. PATAKI, in his official capacity as Governor
of the State of New. York; MAUREEN O. HELMER, in her
official capacity as Chairman of the New York State Public
Service Commission; and THOMAS J. DUNLEAVY, JAMES
D. BENNETT, LEONARD WEISS and NEAL N. GALVIN
in their official capacity as Commissioners of the New York
Public Service Commission,
Defendants,
SHELDON SILVER, Speaker of the New York State
Assembly, and RICHARD L. BRODSKY, MEMBER OF
THE New York State Assembly,
Intervenor-Defendants.
AMENDED JUDGMENT IN A CIVIL CASE
57a
Appendix C
JURY VERDICT. This action came before the
Court for a trial by jury. The issues have been
tried and the jury has rendered its verdict.
XX DECISION by COURT. This action came to trial
or hearing before the Court. The issues have been
tried and a decision has been rendered.
IT IS ORDERED AND ADJUDGED that in the above entitled
action, JUDGEMENT is GRANTED in favor of the Plaintiff;
and it is FURTHER ORDERED, that the plaintiff’s motion
for a permanent injunction is GRANTED, that the plaintiff’s
motion for preliminary injunction is DENIED as moot and
that costs are awarded to the plaintiff-appellee in accordance
with the ORDER of the Honorable Lawrence E. Kahn, United
States District Judge, dated July 18, 2001, the STIPULATION
and ORDER to withdraw the remaining Third Party action
filed on August 30, 2001 and the Second Circuit Court of
Appeals Mandate dated 6/5/02.
DATE: July 2, 2002 LAWRENCE K. BAERMAN
CLERK OF THE COURT
By: s/ Scott A. Snyder
DEPUTY CLERK, Scott A. Snyder
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.