Petition for Writ of Certiorari — Brodsky, New York State Assembly Member v. Consolidated Edison Company of New York, Inc.
Supreme Court brief2002
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GRIS@E OF THE CLERK
No.
In The
Supreme Court of the United States
NEW YORK STATE ASSEMBLY MEMBER, RICHARD L. BRODSKY,
Petitioner,
Vv.
GOVERNOR GEORGE E. PATAKI, CHAIRMAN OF THE PUBLIC
SERVICE COMMISSION, MAUREEN O. HELMER,
COMMISSIONERS OF THE NEW YORK STATE PUBLIC SERVICE
COMMISSION, THOMAS J. DUNLEAVY, JAMES D. BENNETT,
LEONARD D. WEISS AND NEAL N. GALVIN, NEW YORK STATE
ASSEMBLY SPEAKER, SHELDON SILVER, CONSOLIDATED
EDISON COMPANY OF NEW YORK, INC.
Respondents.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE SECOND CIRCUIT COURT OF APPEALS
PETITION FOR WRIT OF CERTIORARI
OF PETITIONER RICHARD L. BRODSKY
JOHN L. PARKER, ESQ.*
RICHARD L. BRODSKY, ESQ.
86" New York State Assembly District
5 West Main Street, Suite 205
Elmsford, NY 10523
(914) 345-0432
*Attorney of Record
PRINTINGHOUSE PRESS, LTD 10 EAST 39th STREET NEW YORK, NY 10016 (212) 719-0990
QUESTIONS PRESENTED
Should the Supreme Court settle the conflict and
clarify the confusion among the Circuits with
regard to the proper legal test to be applied in bill
of attainder cases?
Should the Bill of Attainder provisions of the
Constitution be used to undercut the well-settled
and effective powers of States in the fields of
economic regulation and utility ratemaking?
Should Bill of Attainder Clause be extended, for
the first time, to other than natural persons,
specifically to regulated monopolies?
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TABLE OF CONTENTS
STATEMENT OF THE CASE 2
REASONS FOR GRANTING THE PETITION 8
I.
Il.
THE DECISION OF THE SECOND CIRCUIT IS IN DIRECT
CONFLICT WITH DECISION OF THE D.C. CIRCUIT, AND
CONFLICTS WITH THE LEGAL TEST USED BY THE FIFTH
AND SEVENTH CIRCUITS AND THIS COURT IN BILL OF
ATTAINDER CASES, AND IF UPHELD WILL UNDERMINE
THE ABILITY OF STATES TO RESTRAIN CORPORATE
WRONGDOING AND REGULATE MONOPOLIES. 8
A. The Second Circuit Conceded that Chapter 190 Does
Not Run Afoul of the Three Requirements of the Bill
of Attainder “Punishment” Prong. 11
B. The Second Circuit Creates An Additional Dispositive
Inquiry in the Bill of Attainder Analysis. 12
THE SECOND CIRCUIT ERRED IN USING THE BILL OF
ATTAINDER CLAUSE TO LIMIT STATE REGULATORY
AUTHORITY OVER UTILITIES BY CREATING A PROPERTY
RIGHT IN A PORTION OF AN OVERALL UTILITY RATE IN
CONTRAVENTION OF DECISIONS OF THIS COURT, AND
STRIKING DOWN A STATE REGULATORY STATUTE
OTHERWISE CONSTITUTIONAL, THEREBY PLACING IN
QUESTION THE RATEMAKING AUTHORITY OF STATE
LEGISLATURES. 15
A. The Regulation of Utilities is a State Legislative
Function. 15
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B. Utilities Have No Property Interest In A Portion of
Their Overall Rate. 17
C. Bill of Attainder Protections Are Not A Substitute
For Other Constitutional Protections. 17
TD. The Second Circuit Decision Raises Substantial
Separation of Power Questions. 18
III. THE UNWARRANTED EXTENSION OF BILL OF ATTAINDER
~ PROTECTIONS TO CORPORATIONS GENERALLY, AND
REGULATED MONOPOLIES SPECIFICALLY, IS A
SIGNIFICANT ERROR AND A QUESTION OF SIGNIFICANT
PUBLIC IMPORTANCE. 19
A. This Court Has Been Explicit in its Application
of Bill of Attainder Protections to the Weak. 22
B. The History and Purpose of the Bill of Attainder
Clause Are “Purely Personal,” and Therefore,
Should Not Be Applied To Corporations. 22
CONCLUSION 28
APPENDIX A: Opinion, Court of Appeals for the Second
Circuit (June 5, 2002).
APPENDIX B: Memorandum and Order of the District
Court for the Northern District of New York (October 10,
2000).
APPENDIX C: Bill of Attainder Clause of Article I, Section
10 of the United States Constitution.
APPENDIX D: Chapter 190 of the Laws of 2000.
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APPENDIX E: N.Y. Transportation Corp. Law § 11
(McKinney 2000).
TABLE OF AUTHORITIES
FEDERAL CASES
Bellsouth Communications v. Federal Communications
Comm'n, 144 F.3d 58 (D.C. Cir. 1998) (“Bellsouth I’). 9,10
Bellsouth Communications v. Federal Communications
Comm'n, 162 F.3d 678 (D.C. Cir. 1998)(“ Bellsouth II”). 9, 10
Club Misty, Inc. v Laski, 208 F.3d 615 (7% Cir. 2000). 9,10
Con Edison v. Pataki, et. al., 117 F.Supp.2d 257
(N.D.N.Y. 2000). Lo
Con Edison v. Pataki, et. al., 292 F.3d 338
(274 Cir. 2002). 1, 5, 6, 7, 8, 10, 11, 12, 13,
17, 18, 19, 21, 23, 25
Cummings v. Missouri, 71 U.S. 277 (1866). 22, 24
Duquesne Light Co. v. Barasch, 488 U.S. 299 (1989). 16,17, 18
Ex parte Garland, 71 U.S. 333 (1866). yt A x
First Nat'l Bank of Boston v. Bellotti, 435 U.S. 765 (1978). 23, 24
Flemming v Nestor, 363 U.S. 603 (1960). 8
Knoxville v. Knoxville Water Co., 212 U.S. 1 (1909). 16
Landgraf v. USI Products et al., 511 U.S. 244 (1994). 23
Marshall v. Barlow’s, Inc., 436 U.S. 307 (1978). 26
vi
Navegar, Inc. v. United States, 192 F.3d 1050
(D.C. Cir. 1999). 9
Nixon v. Administrator of Gen. Servs.,
433 U.S. 425 (1977). 6,8, 9, 10, 11, 13, 14, 15, 18, 24, 28, 29
Pierce et al. v. Carskadon. 83 U.S. 234 (16 Wall.) (1872). 22
Plaut v. Spendthrift Farm, Inc., 514 U.S. 211 (1995). 21
SBC Communications, Inc. v. FCC, 154 F.3d 226
(5t Cir. 1998). 9,10, 11
Selective Service System v. Minnesota Public Interest
Research Group et al., 468 U.S. 841 (1984). 7, 8,9, 12, 13, 15,
South Carolina v. Katzenbach, 383 U.S. 301
(1966). 20, 21, 22, 28
United States v. Brown, 381 U.S. 437 (1965). 21, 22, 28
United States v. Lovett, 328 U.S. 303 (1946). 22, 24, 28
United States v. White, 322 U.S. 694 (1944). 23, 27
Wilson v. United States, 221 U.S. 361 (1911). 25
STATE CASES
Matter of Brooklyn Union Gas v. Maltbie, 245 A.D. 74 (1935). 17
People ex rel. Municipal Gas Co. v. Public Serv.
Comm'n, 224 N.Y. 156 (1998). 17
IN THE
SUPREME COURT OF THE UNITED STATES
PETITION FOR WRIT OF CERTIORARI
OPINIONS BELOW
Petitioner respectfully prays that a writ of certiorari
issue to review the judgment below.
The opinion of the United States Court of Appeals for
the Second Circuit appears at Appendix A to the petition
and is reported at 292 F.3d 338 (N.D.N.Y. 2000). The
opinion of the District Court for the Northern District of
New York appears at Appendix B to the petition and is
reported at 117 F.Supp.2d 257 (24 Cir. 2002).
JURISDICTION
The date on which the United States Court of Appeals
for the Second Circuit decided the case was June 5, 2002. No
petition for rehearing was timely filed in this case.
The jurisdiction of this Court is invoked under 28 U.S.C.
§ 1254(1). This petition is timely filed within ninety days of
entry of the June 5, 2002 judgment of the Court of Appeals.
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
Bill of Attainder Clause of Article I, Section 10 of the United
States Constitution.
Chapter 190 of the Laws of 2000.
N.Y. Transportation Corp. Law § 11 (McKinney 2000).
STATEMENT OF THE CASE
This case concerns the unprecedented striking down of a
state statute that set a utility rate on the grounds it is an
unconstitutional bill of attainder.
The petition seeks review of the Second Circuit Court of
Appeals’ decision affirming in part a District Court decision
that held that New York’s Chapter 190 of the Laws of 2000
(“Chapter 190”) was an unconstitutional bill of attainder.
See Appendix D.
Chapter 190 was passed by the Legislature and signed
by the Governor in response to the negligent operation of
the Indian Point II nuclear power facility by Consolidated
Edison (“Con Edison”), which caused a release of radiation
and shut down of the plant on February 15, 2000. Chapter
190 prohibited Con Edison from charging its customers the
estimated $250 million in additional costs required to
replace the power previously produced at Indian Point.
After an appropriate legislative investigation Chapter 190
was passed by both the New York State Assembly and the
New York State Senate and signed into law on August 8,
2000.
The facts which prompted the Legislature to enact
Chapter 190 date back at least to 1974. That year, Con
Edison put Indian Point II into service using Model 44 steam
generators. In 1981, Con Edison and eight other utilities
sued Westinghouse, the manufacturer of the Model 44
generators alleging them to be defective and subject to leaks,
which would progressively degrade over time. As a result
of the litigation, Con Edison and the other utilities received
replacement generators in 1988. Unlike every other utility,
Con Ed knowingly refused to replace the defective
generators, placing them into on-site storage.
Con Edison continued to operate the original Model 44
steam generators it knew and alleged to be defective
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between 1988 and 2000, choosing to perform repairs on
leaking and cracked tubes on numerous occasions, rather
than replace the generators. On February 15, 2000, a tube
rupture did occur, causing a radiation release and an
emergency shutdown of Indian Point II. As a result of that
emergency shutdown, Con Edison purchased replacement
power to provide to their customers. The additional cost of
the replacement power was estimated at $600,000 per day,
for a total in excess of $250 million.
In 1997 the Public Service Commission (“PSC”) allowed
Con Edison to employ a rate recovery mechanism that
includes a monthly fuel adjustment clause (“FAC”). Con
Edison’s FAC included a specific provision limiting its share
of the cost of replacing Indian Point II power in the event of
an outage. Con Edison is the only utility in New York
operating a nuclear power plant that has the benefit-of a
FAC that specifically shields the utility from the costs of a
nuclear outage, and initially allows these additional
replacement power costs to be directly passed to ratepayers
‘without PSC review.
In its continuing exercise of its plenary authority to
regulate utilities and set rates, on November 10, 1999 the
Assembly conducted a Hearing on safety and economic
issues relating to Indian Point II and other facilities.
Following the February 15% outage, the Assembly
reconvened the Hearing on March 3, 2000. The Con Edison
Chief Operating Officer and other Con Edison employees
were invited to and did give sworn testimony with respect
to the outage, the use of the FAC, and other relevant
matters. Con Edison was asked to submit written responses
to questions that it failed to answer at the Hearing. Shortly
after the Hearing, three Members of the New York State
Assembly followed up by letter vith Con Edison, again
requesting Con Edison’s responses to the Assembly’s
_additional questions. Thirty-eight days later, Con Edison
submitted a written response.
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The Legislature, in light of its investigative Hearings and
other information it obtained, found that Con Edison had
knowingly operated Indian Point in an improper manner,
causing the increase in costs to ratepayers. It further
determined that, in the context of an overall rate that was
just and reasonable, the costs of the outage should be borne
by the Company rather than innocent ratepayers, stating in
the 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.
The Governor, prior to signing the legislation that would
become Chapter 190, concluded that
based upon the evidence that has been adduced to date,
it is clear that Con Edison’s maintenance and inspection
practices at the Indian Point 2 facility were flawed and
that Con Edison continued to operate steam generators
at the facility well past the point when it was safe to do
so.... The factual record that has been developed to
date paints a compelling picture of questionable
management decisions and requires immediate
intervention to protect Con Edison’s ratepayers from
bearing the cost of these decisions.
Memorandum of Governor George E. Pataki (August 8,
2000).
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Following passage of Chapter 190, Con Edison filed a
complaint in the U.S. District Court against Governor
George Pataki and certain PSC officials on August 14, 2000.
Petitioners, New York State Assembly Members later joined
the action as Intervenor-Defendants as authorized by Order
dated September 6, 2000.
In its complaint, Con Edison challenged the
constitutionality of Chapter 190 and sought a preliminary
and permanent injunction. Con Edison claimed that
Chapter 190 violated its right to equal protection under the
Fourteenth Amendment; constituted an unlawful bill of
attainder in violation of Article I, § 10 of the U.S.
Constitution; violated its Fourteenth Amendment right to
procedural due process; impaired its contractual rights
under Article 1, § 10 of the U.S. Constitution; was an unjust
taking under the Fourteenth Amendment; violated 42 U.S.C.
§ 1983; and violated the Supremacy Clause of the U.S.
Constitution (Article VI, Clause 2).
By Decision and Order dated October 10, 2000, the
District Court found that Chapter 190 was unconstitutional
because it violated the Equal Protection Clause and
constituted an unlawful bill of attainder. Con Ed v. Pataki,
117 F.Supp.2d 257 (N.D.N.Y. 2000).
A timely notice of appeal was filed to the Second Circuit
Court of Appeals seeking the reversal of the District Court
decision.
Oral arguments were held by the Second Circuit on May
21, 2001. By Decision dated June 5, 2002, the Second Circuit
Court of Appeals affirmed the judgment of the District
Court. Judge Walker noted in his decision that it was based
solely on Con Ed’s bill of attainder claim, and that the
Circuit Court was “skeptical, however, that the [Equal
Protection] Clause would require invalidation of Chapter
190.” Con Ed v. Pataki, et al., 292 F.3d 338, 346 n. 2 (2"4 Cir.
2002). The case was remanded to the District Court to
correct a scrivener’s error in judgment.
In its decision the Second Circuit made a threshold
determination that corporations enjoy the constitutional
protection of the Bill of Attainder Clause, stating that 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.” Con Ed, 292 F.3d at 347. The opinion states
that it is not a “purely personal guarantee” because “[w]hen
a corporation suffers an economic injury its shareholders
suffer the same economic injury.” Con Ed, 292 F.3d at 348.
Thus, the Second Circuit held that “corporations must be
considered ‘individuals,’ . . . that may not be singled out for
punishment under the Bill of Attainder Clause.” Citation
omitted. Con Ed, 292 F.3d at 349 citing Nixon, 433 U.S. at 468.
The Second Circuit then set forth and applied the three-
pronged test established by this Court to determine if a
statute is a bill of attainder, to wit: whether the act: (1)
“determines guilt and inflicts punishment”; (2) “upon an
identifiable individual”; and (3) is “without provision of the
protections of a judicial trial.” Con Ed, 292 F.3d at 346 citing
Nixon v. Administrator of Gen. Servs., 433 U.S. 425, 468 (1977).
“{T]Jhose factors are the evidence that is weighted together
in resolving a bill of attainder claim.” Con Ed, 292 F.3d at 350
citing Nixon, 433 U.S. at 473-78.
With respect to factors (2) and (3), the Second Circuit
concluded, per its threshold determination, that Con Ed is
an “individual,” and that “[i]n the present case, the lack of a
judicial trial is incontrovertible.” Con Ed, 292 F.3d at 346.
The Second Circuit then considered the remaining
prong, (1) “punishment,” which is itself subject to a three
part inquiry: (a) the historical test (whether the statute falls
within the “historical meaning of legislative punishment”);
(b) the functional test (whether the statute, “reasonably can
be said to further non-punitive legislative purposes”); and
(c) the motivational test (whether the legislative record
“evinces a congressional intent to punish”). Con Ed, 292 F.
3d at 350 citing Selective Service System v. Minnesota Public
Interest Research Group et al., 468 U.S. 841, 852 (1984).
Under (a), the historical test, the Second Circuit
recognized that Chapter 190 did not assess a fine or
disability and that this Court has held that an adverse
utility-rate decision is not “confiscatory.” The Second
Circuit conceded that Chapter 190 did not fall within the
historical meaning of legislative punishment, holding
however, “[a] statute need not fit within the historical
category of punishment to be considered such.” Con Ed, 292
F.3d at 351. 7
Under (b), the functional test, the Second Circuit found
numerous non-punitive legislative purposes. “By
preventing Con Ed from passing through the costs
associated with the IP2 outage that it would not have
incurred ordinarily, the legislature prevented Con Ed’s
ratepayers from being forced to bear the costs that the
legislature viewed as negligently incurred. ... This is not
necessarily a punitive purpose.” Con Ed, 292 F.3d at 352.
“Chapter 190 also functions to deter similar conduct by Con
Ed and other public utilities in the future.” On the other
hand, the Second Circuit found that even though Chapter
190 contained legitimate non-punitive reasons, “eliminating
harm to innocent third parties is a purpose consistent with
punishment,” and that “general and specific deterrence are
also traditional justifications for punishments.” Con Ed, 292
F.3d at 352-53. The Second Circuit concluded that it could
“discern no wholly non-punitive purpose to justify the
entire cost-allocation prohibition in Chapter 190.” Con Ed,
292 F.3d at 351, 352-54. The Second Circuit then set forth its
opinion that “[nJeither 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.” Con
Ed, 292 F.3d at 353-54.
Under (c), the motivational test, the Second Circuit
sought to determine if the legislative record evinces a
legislative intent to punish, indicating that “[o]nly the
clearest proof could suffice to establish the
unconstitutionality of a statute on [the] ground [of
legislative history.]” Con Ed, 292 F.3d at 354 citing Flemming
v. Nestor 363 U.S. 603, 617 (1960). The “[s]tatements by a
smattering of legislators ‘do not constitute [the required]
unmistakable evidence of punitive intent.’” Con Ed 292 F.3d
at 354 citing Selective Serv. Sys., 468 U.S. at 856, n. 15. The
Second Circuit referred to two statements made by Senators
in floor debate, and said, “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.” Emphasis
added. Con Ed, 292 F.3d at 354-55. “But the stated intent of at
least some legislators . . . to punish Con Ed reinforces our
independent conclusion that a substantial part of the
legislation cannot be justified by any legislative purpose but
punishment.” Emphasis added. Con Ed, 292 F.3d at 355.
Having made the above determinations the Second
Circuit, referring to some of the language in Nixon, made an
additional inquiry and determination, the “less burdensome
alternative” test. The Second Circuit stated that because
Chapter 190 disallowed certain costs that it believed should
be recovered by Con Edison, “there are plainly ‘less
burdensome alternatives by which [the] legislature . . . could
have achieved its legitimate nonpunitive objectives,’” and
used that determination to justify overturning Chapter 190
as a Bill of Attainder. Con Ed, 292 F.3d at 354.
REASONS FOR GRANTING THE PETITION
I. THE DECISION OF THE SECOND CIRCUIT IS IN DIRECT
CONFLICT WITH DECISION OF THE D.C. CIRCUIT, AND
CONFLICTS WITH THE LEGAL TEST USED BY THE FIFTH
AND SEVENTH CIRCUITS AND THIS COURT IN BILL OF
ATTAINDER CASES, AND IF UPHELD WILL UNDERMINE
THE ABILITY OF STATES TO RESTRAIN CORPORATE
WRONGDOING AND REGULATE MONOPOLIES.
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One significant reason for granting a certiorari petition is
the existence of a conflict among the Circuits with respect to -
the law applied to a particular case. There is, in this case,
such a conflict among the four Circuits which have decided
cases seeking application of Bill of Attainder Clause
protections to corporations. The Second Circuit took
language from this Court’s decision in Nixon suggesting that
the existence of a “less burdensome alternative” might be of
significance to the outcome of that particular case, and
applied it to the legislative remedy existing in Chapter 190,
thereby invalidating the statute. The D.C. Circuit, on the
other hand, explicitly refused to engage in any judicial
inquiry into the availability of alternative methods of
achieving the legislative goal. “In other words, it does not
matter that Congress arguably could have enacted different
legislation.” Emphasis added. Bellsouth Communications v.
Federal Communications Comm'n, 162 F.3d 678, 689 (D.C. Cir.
1998)(“ Bellsouth II’); Citing BellSouth v. FCC, 144 F.3d 58
(D.C. Cir. 1998)(“BellSouth I’). See also Navegar, Inc. v.
United States, 192 F.3d 1050, 1068 (D.C. Cir. 1999).
(“Therefore, since the prohibition effectuated by the act ...
exhibits a purely punitive purpose ... it does not constitute
an unconstitutional bill of attainder.”) This is a conflict
between the Circuits of a kind that this Court has resolved,
and in this case should resolve.
The Fifth and Seventh Circuits did not explicitly reject
the “less burdensome alternative” inquiry, but did not apply
it in reaching their decisions, and rejected Bill of Attainder
Clause claims made by the corporate plaintiffs before them.!
' Nixon, 433 U.S. at 468; SBC Communications,, 154-F.3d at 242;
Bellsouth II, 162 F.3d at 684; Selective Seruc. Sys., 468 U.S. at 852.
The Seventh Circuit ruled on other constitutional grounds, but
stated, “The requirement of punishment is most clearly satisfied
when a punitive purpose is conjoined with a characteristically
punitive sanction, such as a fine.” Club Misty, 208 F.3d at 617
Internal citations omitted.
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The Second Circuit, unable to invalidate Chapter 190 as a
bill of attainder using the correct test, added a new and
dispositive “less burdensome alternative” requirement in its
punishment analysis as its grounds for finding Chapter 190
_ to be a bill of attainder.? This places the Second Circuit in
conflict with the other circuits as to the proper legal test to
be applied in Bill of Attainder Clause cases. This is the heart
of the conflict among the Circuits.
This conflict is compounded by a fundamental
uncertainty in each of the Circuits about whether or not
corporations are to be afforded bill of attainder protections,
and the unexamined “assumption” by several circuits that
they are. See SBC Communications, Inc. v. FCC, 154 F.3d 226,
234 (5% Cir. 1998); Bellsouth I, 144 F.3d at 63; Bellsouth II, 162
F.3d at 684; Club Misty v. Laski, 208 F.3d 615, 617 (7% Cir.
2000).
This conflict and confusion should be remedied by this
Court.
The conflict appears clearly in the respective opinions of
_the D.C., Fifth, and Second Circuits.
The D.C. Circuit’s language is explicit:
In addition, as we noted in BellSouth I, 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 in an effort
to open the long distance markets to competition.
Emphasis added. Bellsouth II, 162 F.3d at 689. Citing BellSouth
I, 144 F.3d 58. Internal citations omitted. The D.C. Circuit
clearly rejects the “less burdensome alternative” test that the
Second Circuit relies upon in this case.
2 The Second Circuit asserts “we look beyond simply a rational
relationship of the statute to a legitimate public purpose for ‘less
burdensome alternatives.’” Con Ed, 292 F.3d at 350 citing Nixon,
433 U.S. at 482.
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The Fifth Circuit similarly did not apply a “less
burdensome” analysis in its Bill of Attainder Clause
analysis. The Fifth Circuit stated “In the light of the 400
years of case law and history that we have considered, we
believe that Nixon stands, ultimately and concisely, for the
following proposition: if legislation has a legitimately
nonpunitive function, purpose, and structure, it does not
constitute punishment for purposes of the Bill of Attainder
Clause, even where it imposes the historically punitive
sanction of barring designated individuals from engaging in
certain professions.” SBC Communications, 154 F.3d at 241.
The Fifth Circuit's failure to apply such a “less burdensome
alternative” test is different from the approach of the Second
Circuit.
A. The Second Circuit Conceded that Chapter 190 Does
Not Run Afoul of the Three Requirements of the Bill
of Attainder “Punishment” Prong.
First, the Second Circuit admitted that Chapter 190 has
many legitimate non-punitive purposes, including the one
most central to the Legislature’s investigation and findings.
“The legislature could legitimately conclude that, as
between Con Ed, the party that caused the outage, and the
ratepayers, parties having nothing whatsoever todo 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.”3 Con Ed,
292 F.3d at 352.
3 Despite finding a legitimate non-punitive purpose, the Second
Circuit reasoned that “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.”
Con Ed, 292 F.3d at 353. The Second Circuit concluded that
12
Second, the Second Circuit conceded that Chapter 190
does not meet the historical meaning of punishment, such as
a fine, confiscation of property, or denial of the right to
work. It recognized that this Court has held that an adverse
utility-rate decision is not “confiscatory.” However, without
any other historical analysis, it concluded that “[a] statute
need not fit within the historical category of punishment to
be considered such.” Con Ed, 292 F.3d at 351.
And third, the Second Circ1it conceded the absence of
evidence of the traditional indicia of punitive legislative
intent. “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. But the stated
intent of at least some legislators ... to punish Con Ed
reinforces our independent conclusion that a substantial part
_ of the legislation cannot be justified by any legislative
purpose but punishment.” Emphases added. Con Ed, 292 F.3d
at 354-55. The Second Circuit does not offer any other
evidence of punitive legislative intent for its “independent
conclusion.”
B. The Second Circuit Creates An Additional
Dispositive Inquiry in the Bill of Attainder
Analysis.
Having thus far failed to invalidate Chapter 190 by
applying the traditional test, the Second Circuit looked for
because Chapter 190 did not allow all of these undetermined costs
to Con Edison, and that some of these costs would have been
incurred even in the absence of Con Edison’s misconduct it found
no “wholly non-punitive purpose to justify the entire cost-allocation
prohibition.” Emphasis added. Con Ed, 292 F.3d at 351-54. It cited
no authority for such a restrictive test, which in fact directly
‘conflicts with this Court’s holding in Selective Sroc. Sys., which
characterized the relevant test as “whether the challenged state
can be reasonably said to further nonpunitive goals.” Emphasis
added. 468 U.S. at 853-54.
EERE VANS DLR ELC AE ODE CAEEOER ISLA GERARD OR
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new grounds to invalidate that statute. It decided to “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.’” Citations in original.
Con Ed, 292 F.3d at 350, citing Nixon, 433 U.S. at 482. The
Second Circuit mistakenly created this additional line of
inquiry and made it dispositive of the question of
punishment. The Second Circuit ignored the warnings of
this Court about the language in Nixon. In Nixon, this Court
stated that
One final consideration should be mentioned in light of
the unique posture of this controversy. 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 by which that legislature
(here Congress) could have achieved its legitimate
nonpunitive objectives.
Nixon, 433 U.S. at 482. Thus, Nixon limited the “less
burdensome alternative” inquiry to the unique
circumstances of the Nixon case. Most importantly, it did so
as part of the overall determination, not as the Second
Circuit held, as an additional and dispositive element of the
existing three prong ‘punishment’ inquiry under Selective
Sroc. Sys., 468 U.S. at 852, and not as the sole basis for
overturning a statute as a bill of attainder.
The overreaching by the Second Circuit becomes clearer
upon a complete reading of the Nixon decision. In Nixon,
mindful of the “social and political realities of 1974” and the
“political turbulence unprecedented in our history,” this
Court stated that it
is not free to invalidate Acts of Congress based upon
inferences that we may be asked to draw from our
personalized reading of the contemporary scene or
recent history. In judging the constitutionality of the
Act, we may only look to its terms, to the intent
expressed by Members of Congress who voted its
14
passage, and to the existence or nonexistence of
legitimate explanations for its apparent effect.
Nixon, 433 U.S. at 484. This Court has made clear that the
“less burdensome” inquiry relied on by the Second Circuit
should not be used as subterfuge to strike down legislation
because it does not comport with a court’s social or
economic policy preferences.
The Second Circuit created a new, dispositive test for
finding punitive intent without any record evidence of such
intent; it admitted that restraining Con Edison from
charging ratepayers for the consequences of its own
misdeeds is a legitimate purpose; and it was unable to find
any historical precedent for defining a rate allocation system
as punishment. It then chose to substitute it own policy
preferences for the measured decision of the Legislature and
the Governor. This is unconstitutional, unwise and will
serve to endanger economic regulatory decisions made by
legislative bodies across the nation.
The sheer unworkability of the Second Circuit's “less
burdensome” test is a function of the difficulty, if not the
impossibility, of determining which of several potential
legislative remedies is less burdensome. This test would
have been difficult enough if the Second Circuit sought the
“least” burdensome alternative but it will always be possible
to argue to a Court that some other or new remedy is “less”
burdensome than that selected by the legislature. Courts are
particularly unprepared to make these relative policy
judgments.
The Second Circuit’s “less burdensome alternative”
analysis, if upheld, will place the federal courts in the
untenable and unconstitutional position of substituting their
judgments about the relative merits of competing economic
regulatory options, decisions which are functionally and
constitutionally best made by elected legislative bodies. In
the instant case, the fact that a “less burdensome
alternative” existed, in the opinion of the Second Circuit, is
the only evidence cited of the Legislature’s intent to punish.
15
The Second Circuit's belief that the Legislature might have
taken a different route with Chapter 190 is not reason for it
to be struck down as a bill of attainder when it otherwise
fails to meet the requirements of Nixon and Selective Sruc.
Sys., and does not violate other constitutional provisions. In
contrast to the correct legal test applied by the Fifth,
Seventh, and D.C. Circuits, the Second Circuit’s reliance on
this additional element, if upheld, will open a floodgate of
litigation challenging otherwise valid state economic
regulation, and will probably result in the re-litigation of the
issues in the cases decided by the other Circuits, and may
provoke the Federal Civil Rights statutes to challenge state
economic regulatory statutes.
This Court should use its supervisory power to clarify
this conflict and reaffirm that the Nixon case was in its own
words, “unique” and that the traditional three-pronged test,
unaltered, remains the correct standard.
This conflict among the Circuits as to the correct test to be
applied is compounded by the assumption by three Circuits
that corporations enjoy the protections of the bill of
attainder provision of the Constitution, as opposed to the
specific holding by the Second Circuit to the same effect.
Since the federal intrusion into state regulatory authority
over corporations is substantial, and the consequences of
this new uncertainty are significant, this Court should
decide for itself whether a new constitutional right will be
conferred, as discussed below in III.
II. THE SECOND CIRCUIT ERRED IN USING THE BILL OF
ATTAINDER CLAUSE TO LIMIT STATE REGULATORY
AUTHORITY OVER UTILITIES BY CREATING A PROPERTY
RIGHT IN A PORTION OF AN OVERALL UTILITY RATE IN
CONTRAVENTION OF DECISIONS OF THIS COURT, AND
STRIKING DOWN A STATE REGULATORY STATUTE
OTHERWISE CONSTITUTIONAL, THEREBY PLACING IN
QUESTION THE RATEMAKING AUTHORITY OF STATE
LEGISLATURES.
16
A. The Regulation of Utilities is a State Legislative
Function.
The regulation of corporate economic behavior,
especially of regulated monopolies, is a traditional and
important function of state government. This Court has
firmly and repeatedly held that utility ratemaking is a
legislative function, which can be exercised directly by the
legislature or delegated to a subsidiary body. The existence
of the subsidiary body does not diminish the authority of
the legislature to act directly. By inserting a bill of attainder
analysis the Second Circuit has created a new, unworkable,
federal judicial intrusion into the operations of state
legislatures and their ability to protect their citizens from
economic wrongdoing by regulated monopolies.
The Second Circuit plainly ignored this Court’s holding
in Duquesne Light Co. v. Barasch, 488 U.S. 299 (1989). “[I]t
cannot seriously be contended that the Constitution
prevents state legislatures from giving specific instructions
to their utility commissions. We have never doubted that
state legislatures are competent bodies to set utility rates.”
Duquesne, 488 U.S. at 313. This Court affirmed that
ratemaking remained a legislative function, even as states
across the nation chose to set aside the historical practice of
individual utility rates for individual utilities being set by
individual statutes, and began to establish regulatory
commissions. See Knoxville v. Knoxville Water Co., 212 U.S. 1
(1909). In Knoxville, this Court carefully eschewed an
opportunity for judicial intervention into the ratemaking
process, noting that “[t]he function of ratemaking is purely
legislative in its character, and this is true, whether it is
exercised directly by the legislature itself or by some
subordinate or administrative body.” Knoxville, 212 U.S. at
8.
New York Courts have similarly ruled on numerous
occasions that utility regulation remains essentially
17
legislative in nature. See People ex rel. Municipal Gas Co. v.
Public Serv. Comm'n, 224 N.Y. 156, 166-67 (1998) (“The
Legislation . . . intended to retain unto itself the power of
fixing rates . .. We cannot discern in such retention of
legislative power any violation of constitution provision.”);
Matter of Brooklyn Union Gas v. Maltbie, 245 A.D. 74, 75 (1935)
(“Ratemaking is a legislative function; the commission acts
by delegated authority. Legislative methods may be
followed in arriving at a decision and rate.”)* The Second
Circuit decision intrudes bill of attainder protections upon
this legislative power in ways that will cause uncertainty
and disruption of the regulatory process unless clarified by
this Court.
B. Utilities Have No Property Interest In A Portion of
Their Overall Rate.
The Second Circuit compounded its initial attack on the
legislative ratemaking function by declaring, again in
contravention of Duquesne and other decisions of this Court,
that a utility has a property right in a portion of an overall
utility rate which is otherwise just and reasonable. The
Second Circuit ruled that Con Edison was deprived of a
property interest by Chapter 190, which undisputedly deals
with only one portion of Con Edison’s overall rate structure,
the Fuel Adjustment Clause. “Chapter 190 clearly deprived
Con Edison of a property interest.” Con Ed, 292 F.3d at 351.
Con Ed has never asserted, indeed concedes, that their
overall rate is adequate and fair. In Duquesne, this Court
ruled that a utility does not have a property right in a
4 An additional consequence of the Second Circuit decision may
be that ratemaking, whether done by legislatures or by their
designees will be constrained to use judicial processes required by
the Second Circuit in this case in spite of well settled doctrine that
legislative methods may be used to set rates.
—_—_—__—~
18
component of its overall rate, stating that “[i]f the total effect
of the rate order cannot be said to be unreasonable, judicial
inquiry ...is atanend.” Duquesne, 488 U.S. at 310. The
creation of a property right in a portion of a rate will disrupt
the traditional, well-settled, and effective state regulatory
structures and policy, and invite burdensome litigation
when either legislatures or their designees change a portion
of an overall rate structure.
C. Bill of Attainder Protections Are Not A Substitute
For Other Constitutional Protections. —
This Court has specifically ruled that bill of attainder
protections are not to be a substitute for other constitutional
protections used to attack legislative exercise of the police
power. As Justice Brennan warned, “[h]owever expansive
the prohibition against bills of attainder, it surely was not
intended to serve as a variant of the equal protection
doctrine.” Nixon, 433 U.S. at 471. Con Edison initially
attacked the statute as constitutionally invalid on four
separate grounds, equal protection, due process, violation of
contract and bill of attainder. All these matters were
extensively briefed and argued in both the District and
Circuit courts. The District Court held for Con Ed on equal
protection and bill of attainder grounds. The Second Circuit
discounted the equal protection holding and relied solely on
bill of attainder to invalidate the statute. Con Ed, 292 F.3d at
345 n. 2.
Chapter 190 was carefully drawn to preserve all
constitutional protections, and yet protect citizens against
the economic consequences of wrongdoing and negligence
by a monopoly corporation. Having met the appropriate
constitutional thresholds for such economic regulation, the
Legislature should not be hamstrung by a new, additional,
and unworkable restriction on its regulatory authority. This
is especially true when the judicial intervention takes the
form of a new constitutional right, such as the bill of
ENE, BARR PRR RIE
Sd RRA BETA AR RO SET ses PEAS ES hs SER
19
attainder protections afforded to corporations. Only the
most thorough and dispositive declaration by this Court
should be the basis of the profound and wrenching
reconfiguration of the state-federal relationship on the
regulation of corporations created by state law, especially
regulated monopolies that have both public and private
attributes.
III. THE UNWARRANTED EXTENSION OF BILL OF ATTAINDER
PROTECTIONS TO CORPORATIONS GENERALLY, AND
REGULATED MONOPOLIES SPECIFICALLY, IS A
SIGNIFICANT ERROR AND A QUESTION OF SIGNIFICANT
PUBLIC IMPORTANCE.
The protections of the Bill of Attainder Clause have
previously been applied by this Court only to natural
persons or groups of natural persons who were oppressed
or disfavored by the government for their political or
personal activities. The essential purposes of the English
~and American restrictions on bills of attainder have been to
protect those without the power or resources to protect
themselves from the overwhelming power of legislative
oppression, as other sections of the Constitution protect
against executive oppression. The extension of bill of
attainder protections to private corporations is without
precedent, inconsistent with the purposes and history of
bills of attainder, and a dramatic federal intrusion into state
economic regulation. The Second Circuit apparently was
aware of the significance of its decision when it
acknowledged that it was “unable to unearth any case in
which a corporation has ultimately prevailed in challenging
legislation as a bill of attainder.” Emphasis added. Con Ed,
292 F.3d at 348. This is especially true when applied to
regulated monopolies, against whom state regulatory and
ratemaking powers are the sole and acknowledged
protection for people subject to the monopoly.
20
The decision of the Second Circuit will have a significant
impact on the legal, economic and practical structures of
everyday life because it may expose numerous laws
regulating economic activity to constitutional challenge -
even in highly regulated industries such as utilities where
legislatures have traditionally exercised broad powers.
Corporations may rely on the Second Circuit’s decision
to attempt to overturn legitimate corporate regulation of
individual or groups of corporations. And, because the
specificity requirement of the Bill of Attainder Clause is met
where the legislation singles out “an identifiable group,”
corporations could use the language and logic of the Second
Circuit to bring bill of attainder challenges to many
commonplace economic measures that limit the conduct of
or place regulatory burdens upon particular industries. The
consequences of such uncertainty will be felt by every court
and every legislative body in this country.
Corporations do have protections against unjust
regulatory initiatives in the Takings Clause, the Equal
Protection Clause and the Due Process Clause. The Bill of
Attainder Clause protections will be a burdensome and
unnecessary restriction of legislative activity.
The Second Circuit extension of Bill of Attainder Clause
protections to corporations is based on a misreading of the
test used by this Court when extending constitutional rights
to corporations and a misreading of this Court’s previous
decisions. The Second Circuit acknowledged that this Court
has not “directly” ruled on the question, citing South
Carolina v. Katzenbach, 383 U.S. 301, 324 (1966). In Katzenbach
this Court rejected a claim by South Carolina that the Voting
Rights Act was a bill of attainder against the states of the
Union. Katzenbach, 383 U.S. 301. This Court held that the
Clause did not apply to states because “courts have
consistently regarded the Bill of Attainder Clause . . . only as
protection for individual persons and private groups, those
who are peculiarly vulnerable to non-judicial determination
21
of guilt.” Katzenbach, 383 U.S. at 324. There is no reason to
think this reference encompasses corporations.
The other decision of this Court 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 Second Circuit
cited dictum in Plaut, 514 U.S. at 239 n. 9 for the assertion
that “a bill of attainder may target a ‘single individual or
firm’” without discussion of the definition of the word.>
Emphasis in original. Con Ed, 292 F.3d at 347.
The Second Circuit, based upon these two cited cases
from this Court, concluded with circular logic that “[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.”
Con Ed, 292 F.3d at 347.
In fact, this Court has applied Biil of Attainder Clause
protections only five times in its history, and only to natural
persons and groups of natural persons who are particularly
weak or powerless because of their vulnerability or
unpopularity. In United States v. Brown, 381 U.S. 437 (1965),
the act struck down made it a crime for present and former
—
Dictionary definitions of “firm” make it clear, however, that a
corporation, with its independent legal existence, is not a firm. A
firm is “a partnership of two or more persons that is not
recognized as a legal person distinct from the members composing
it.” Merriam-Webster’s Dictionary of Law, visited on August 18,
2002 (http://dictionary.lp.findlaw.com). A “business entity or
enterprise. Unincorporated business. Partnership of two or more
persons.” Blacks Law Dictionary, 6" Ed. (1990) at 634.
22
members of the Communist Party to serve as officers of a
labor union. In United States v. Lovett, 328 U.S. 303 (1946) the
act provided that no federal budget appropriation could be
used for salaries of three specifically named government
employees who had been named as subversives by the
House Committee on Un-American Activities unless
reappointed by the President and confirmed by the Senate.
In Ex parte Garland, 71 U.S. 333 (1866), the act conditioned
admission to the practice of law upon an oath that the
individual never bore arms against or supported enemies of
the United States. In Cummings v. Missouri, 71 U.S. 277
(1866), the act made it a crime to practice law or be a
clergyman without taking an oath that the individual had
not been disloyal to the United States. Finally, in Pierce et al.
v. Carskadon. 83 U.S. 234 (16 Wall.) (1872), a case very similar
to Ex parte Garland and Cummings, this Court protected
individuals denied the right to seek judicial redress because
they were ex-Confederates. In these successful bill of
attainder cases, the challenged statutory sanctions were
against natural persons, Communists or Confederates,
people perceived as subversives or traitors, and widely
considered politically disloyal to the United States
government.
The Second Circuit’s decision wrongly takes a
considerable leap from these precedents when it finds a
corporation analogous to one or more unpopular natural
persons.
A. This Court Has Limited Its Application of Bill of
Attainder Protections to the “Peculiarly
Vulnerable.”
“Courts have consistently regarded the Bill of Attainder
Clause of Article I,. . . only as protections for individual
persons and private groups, those who are ‘peculiarly
vulnerable to non-judicial determinations of guilt.”
Katzenbach, 383 U.S. at 324, citing Brown, 381 U.S. 437 and Ex
23
parte Garland, 4 Wall 332. See also Landgraf v. USI Products et
al., 511 U.S. 244, 253 (1994) (“The prohibitions on Bills of
Attainder in Art. I §§ 9-10, prohibit legislatures from
singling out disfavored persons.”).
The Second Circuit ignored this Court’s application of
Bill of Attainder protections only to “disfavored” or
“peculiarly vulnerable” natural persons because, in the case
of a multi-billion dollar monopoly, it cannot make such a
finding, any more than Con Edison itself has ever made
such a claim. The notion that it can be used as a defense for
state regulation of corporate or monopoly wrongdoing
: stands the constitution on its head and leaves individual
and groups of natural persons at the mercy of a state created
i legal fiction, a monopoly utility. The limitation of bill of
attainder protections to one or more natural persons is
| consistent with the history, purposes, and application by
this Court of the Bill of Attainder Clause.
B. The Nature, History and Purpose of the Bill of
Attainder Clause Are “Purely Personal,” and
Therefore, Should Not Be Applied To Corporations.
This Court has carefully considered the “nature, history,
and purpose” of constitutional protections sought by
corporations, and granted some and denied others. In this
case, the Second Circuit concluded “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.” Con Ed, 292 F.3d at 347.
“{C]ertain ‘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.” First Nat'l Bank of Boston v.
Bellotti, 435 U.S. 765, 778-79 n. 14 (1978) (citing United States
v. White, 322 U.S. 694, 698-701 (1944)). The test of “whether
or not a particular guarantee is ‘purely personal’ or is
unavailable to corporations for some other reason depends
24
on the nature, history, and purpose of the particular
constitutional provision.” Bellotti, 435 U.S. at 778-79.
This Court undertook an extensive review of the history
of the Bill of Attainder Clause in Nixon. This Court stated
that “[iJn England a bill of attainder originally connoted a
parliamentary Act sentencing a named individual or i
identifiable members of a group to death” and also
proscribed “enactments originally characterized as bills of
pains and penalties, that is, legislative Acts inflicting
punishment other than executions.” Nixon, 433 U.S. at 473 -
474 (citing United States v. Lovett at 323-324 (Frankfurter, J.,
concurring); Cummings v. Missouri, 71 U.S. at 323 and Z.
Chafee, Jr., Three Human Rights in the Constitution of 1787,
at 97 (1956). As an example, this Court cited a specific bill of
attainder legislatively sentencing James, Duke of Monmouth
to death. Nixon, 433 U.S. at 474 (citing 1 Jac. 2, c.2 (1685).
This Court cited Blackstone for provisions that usually
accompanied such a bill, such as “forfeiture of the
condemned person’s property to the King and the
corruption of his blood, whereby his heirs were denied the
right to his estate,” practices dating back to the Norman
conquest of England. Nixon, 433 U.S. at 474 (citing 4 W.
Blackstone Commentaries 388.) This Court’s historical
analysis also discussed its expansion of the bill of attainder
protection to include legislative enactments “barring
designated individuals or groups from participation in
specified employments or vocations, a mode of punishment
commonly employed against those specifically branded as
disloyal.” Nixon, 433 U.S. at 474. Citations omitted.
The only historical reference to the history and purposes
of the Bill of Attainder Clause made by the Second Circuit is
its unexamined reference to ancient English law. “Con Ed
cites several English statutes that imposed disabilities on
English boroughs, hardly natural persons. See, e.g., 1 & 2
25
Geo. 4, c.47 (Eng. 1821).Ӣ Con Ed, 292 F.3d at 348. The
Second Circuit offers no other evidence or analysis of the
history of Bill of Attainder protections.” This Court has
spoken clearly about the limited value of such early English
precedents in Wilson, “[w]e have not overlooked the early
English decisions to which our attention has been called ...
but these cannot be deemed controlling. The corporate
duty, and the relation of the appellant as the officer of the
corporation to its discharge, are to be determined by our
“laws.” Wilson v. United States, 221 U.S. 361 at 385-86. The
Second Circuit's historical analysis, resting purely on these
English precedents as it does, is incompatible with the
instructions of this Court.
With respect to the nature and purpose of the Bill of
Attainder Clause, the Second Circuit failed to consider
factors that motivated the Founders to include bill of
attainder protections in the Constitution, and their
considerable resentment towards the nature and purpose of
English Bills of Attainder. The Founders saw a compelling
need to proscribe the legislative power misused against
individuals. James Madison, in Federalist 44, noted that
such Bills are “contrary to the first principles of the social
compact” and that Americans “have seen with regret and
indignation that sudden changes and legislative
interferences, in cases affecting personal rights, become jobs
in the hands of enterprising and influential speculators, and
snares to the more industrious and less informed part of the
community.” The Federalist Papers. Clinton Rossiter, ed.
Mentor Books, New York (1961) at 282. Alexander
Hamilton quoting Blackstone in Federalist 84, stated that
© It should be noted that in English law a borough is a
governmental entity, not a private corporation.
7 The Second Circuit, instead stated that the Clause’s history
has been “aptly described elsewhere . . . we see no need to
reiterate it here.” Con Ed, 292 F.3d at 346.
26
“To bereave a man of life “O says he” or by violence to
confiscate his estate, without accusation or trial, would be so
gross and notorious an act of despotism.” Id. at 511-2.
There is never the slightest hint that the Legislative effort in
Chapter 190 to protect the citizenry from the economic
misdeeds of its own legal creations could rise to the level of
a bill of attainder.
A comparison of decisions granting and denying
constitutional protections to corporations further illuminates
why bill of attainder protections should not be granted to
corporations.
In Marshall v. Barlow’s, Inc., this Court found that the
constitutional provision against unreasonable search and
seizure applied to corporations. 436 U.S. 307 (1978). This
Court held that “it is untenable that the ban on warrantless
searches was not intended to shield places of business as
well as of residence.” Marshall, 436 U.S. at 312. In reaching
this conclusion, this Court in looking to the American
colonial experience stated that “[t]he general warrant was a
recurring point of contention in the Colonies immediately
preceding the Revolution. The particular offensiveness it
engendered was acutely felt by the merchants and business
men whose premises and products were inspected for
compliance with the several parliamentary revenue
measures that most irritated the colonists.” Marshall, 436
USS. at 310. This Court also cited the Virginia Bill of Rights,
which predates the U.S. Bill of Rights, which specifically
“opposed ‘general warrants, whereby an officer or
messenger may be commanded to search suspected places
without evidence of a fact committed.” Id. (citing in footnote
H. Commager, Documents of American History 104 (8% ed.
1968). Thus, this Court’s review of the historical basis of the
Fourth Amendment’s Warrant Clause protections showed
both the history and purpose of the protection, and that it
was intended to apply to and protect the merchants and
other businessman of the day. There is no similar history
with respect to bill of attainder protections.
27
In White, this Court held that the right against self-
incrimination set forth in the Fourth and Fifth Amendments
of the Constitution did not apply to corporations because
their purpose was “directed primarily to the protection of
individual and personal rights.” White, 322 U.S. at 698. This
Court reasoned that the
constitutional privilege against self-incrimination is
essentially a personal one, applying only to natural
individuals. It grows out of the high sentiment and
regard of our jurisprudence for conducting criminal
trials and investigatory proceedings upon a plane of
dignity, humanity and impartiality. It is designed to
prevent the use of legal process to force from the lips of
the accused individual the necessary evidence to convict
him or to force him to produce and authenticate any
personal documents or effects that might incriminate
him. Physical torture and other less violent but equally
reprehensible modes of compelling the production of
incriminating evidence are thereby avoided.
White, 322 U.S. at 698..
The application of the Bill of Attainder Clause to
corporations thus has no grounding in history, law or
precedent, and is completely inconsistent with the
traditional and necessary power of states to protect their
citizens from corporate wrongdoing. As noted above, there
is no claim here that Chapter 190 fundamentally interferes
with Con Edison’s ability to conduct its business, nor that
Chapter 190 created an overall rate of return that is unfair or
unjust. There was a question about who should pay the
costs associated with the undisputed negligence of Con
Edison with respect to Indian Point. The Legislature, faced
with a specific set of actions by Con Edison and their
economic consequences apportioned the economic harm as
between innocent ratepayers and a culpable monopoly.
There is no basis in history or logic to use bill of attainder
protections to limit state authority over a monopoly utility.
28
If, arguendo, bill of attainder protections were to be
afforded to private corporations, their further application to
regulated monopolies would not be sound doctrine because
of the acknowledged, quasi-public nature of such utilities.
Con Edison is not a corporation as that term is commonly
understood and used, but instead is a unique creation of
New York State Law. Con Edison is a quasi-governmental
public utility publicly vested with public responsibilities
such as the right of condemnation. See N.Y. Transportation
Corp. Law § 11 (McKinney 2000). Thus, the line between
government and private corporation is significantly blurred
in this case. As this Court noted in Katzenbach, > State may
not maintain a bill of attainder claim. Katzenbach, 383 U.S. at
324. As such, the protections of the bill of attainder cannot
attach to Con Edison.
The limited use of this constitutional provision by this
Court to acts of unfairness against the politically unpopular,
rather than as a shield against appropriate economic
regulation of corporations was best summed up by Justice
Brennan who, when speaking for this Court in Nixon noted
any individual or group that is made the subject of
adverse legislation can complain that the lawmakers
could and should have defined the relevant affected
class at a greater level of generality. Furthermore, every
person or group made subject to legislation which he or
it finds burdensome may subjectively feel, and can
complain, that he or it is being subjected to unwarranted
punishment. United States v. Lovett. [citation omitted in
original.] However expansive the prohibition against
bills of attainder, it surely was not intended to serve as a
variant of the equal protection doctrine, invalidating
every Act of Congress or the States that legislatively
burdens some persons or groups but not all other
plausible individuals. In short, while the Bill of
Attainder Clause serves as an important “bulwark
against tyranny,” United States v. Brown, 381 U.S. at 443,
it does not do so by limiting Congress to the choice of
29
legislating for the universe, or legislating only benefits,
or not legislating at all.
433 U.S. 425, 471-72.
CONCLUSION
As this Court noted in Nixon, “ [forbidden legislative
punishment is not involved merely because the Act imposes
burdensome consequences.” 433 U.S. at 472. While Con
Edison may argue that Chapter 190 is burdensome, it does
not impose punishment within the meaning of the Bill of
Attainder precedents of this Court.
For the foregoing reasons, the petition for a writ of
certiorari should be granted.
Respectfully submitted,
/) 4 —™
/ f oe
Dt PP ge i 7
ps sr Sf: o ae, Ty,
a
/
Jolin L. Parker, Esq.*
Counsel
Richard L. Brodsky, Esq.
86t New York State Assembly District
5 West Main Street, Suite 205
Elmsford, NY 10523
(914) 345-0432
(914) 345-0436 fax
*Attorney of Record
Date: September 3, 2002.
APPENDIX A
A-1
CONSOLIDATED EDISON COMPANY OF NEW YORK,
INC., Plaintiff-Appellee, 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, THOMAS J. DUNLEAVY, JAMES D.
BENNETT, LEONARD D. WEISS and NEAL N. GALVIN
in their official capacities as Commissioners of the New
York State Public Service Commission, Defendants-
Appellants, RICHARD L. BRODSKY, New York State
Assembly Member and SHELDON SILVER, New York
State Assembly Speaker, Intervenors-Defendants-Appellants.
Docket Nos. 00-9358(L), 00-9426(CON), 00-9442(CON)
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
292 F.3d 338; 2002 U.S. App. LEXIS 10762
May 21, 2001, Argued
June 5, 2002, Decided
PRIOR HISTORY: [**1] 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 state statute
against plaintiff Consolidated Edison Company of New
York, Inc. 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.
Consolidated Edison Co. of N.Y., Inc. v. Pataki, 117 F. Supp.
2d 257, 2000 U.S. Dist. LEXIS 14985 (N.D.N.Y. 2000)
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DISPOSITION: Affirmed and remanded for correction of
judgment.
COUNSEL: LAURA ETLINGER, Assistant Solicitor General
of the State of New York (Eliot Spitzer, Attorney General of
the State of New York, Daniel Smirlock, Deputy Solicitor
General of the State of New York, Peter H. Schiff, Senior
Counsel, on the brief), Albany, NY, for Defendant-Appellant
Governor Pataki.
LAWRENCE G. MALONE, Public Service Commission of
the State of New York (Diane T. Dean, on the brief), Albany,
NY, for Defendants-Appellants Commissioners of the Public
Service Commission.
RICHARD L. BRODSKY, ESQ., New York State Assembly,
Counsel to the Majority (Rosemary Perez Jaquith, on the
brief), Albany, NY, for Intervenors-Defendants-Appellants.
GUY MILLER STRUVE, [**2] Davis, Polk & Wardwell
(James D. Liss, Florence A. Crisp, Zachary D. Stern, Davis,
Polk & Wardwell, Charles E. McTiernan, Jr., Richard J.
Giglio, Scott A. Levinson, Roxana Barsalona, Consolidated
Edison Company of New York, Inc., on the brief), New
York, NY, for Plaintiff-Appellee.
JOHN C. RICE, ESQ., Rice & Justice (Lawrence P. Justice,
Bradley F. Rice, on the brief), Albany, NY, for Amicus
Curiae Business Council of New York State, Inc.
MICHAEL F. MCBRIDE, LeBoeuf, Lamb, Greene & MacRae,
LLP (Bruce W. Neely, Martin G. Malsch, John W. Lawrence,
LeBoeuf, Lamb, Greene & MacRae, LLP, Edward H. Comer
and Henri Bartholmot, Edison Electric Institute, Robert W.
Bishop and Ellen C. Ginsberg Nuclear Energy Institute, on
~~
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the brief) Washington, DC, for Amici Curiae Edison Electric
Institute and Nuclear Energy Institute.
JUDGES: Before: WALKER, Chief Judge, JACOBS, Circuit
Judge, LARIMER, Chief District Judge.”
OPINION BY:
JOHN M. WALKER, JR.
OPINION:
[*342] x
JOHN M. WALKER, JR., Chief Judge:
Defendant state officials appeal from a judgment of the
[**3] 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
[*343] 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.
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”)
* The Honorable David G. Larimer of the United States District
Court for the Western District of New York, sitting by designation.
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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 [**4] 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 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. [**5]
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.
pa healt dG
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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, 134 A.D.2d 135, 523 N.Y.S.2d 615, 620 (N.Y.
App. Div. 1987). [**6] 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). [*344]
Pursuant to the FAC, Con Ed increased its rates to
incerporate 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.
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
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plant. The hearing [**7] 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 (“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
[**8] 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
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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 (**9] 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 [*345] 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.
In a memorandum 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 [**10] injunction. Con Ed v. Pataki, 117 F. Supp.
A-8
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. Id. at 262-65. The district cqurt 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. Id. 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
unconstitutional bill of [**11] attainder, we affirm the district
court. We need not and do not address Con Ed’s other
constitutional theories.?
I. The Bill of Attainder Clause of Article I, Section 10
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 I.
? 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: “[M]ere
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.” Nixon v. Adm’r of Gen. Servs.,
433 U.S. 425, 471 n.33, 53 L. Ed. 2d 867, 97 S. Ct. 2777 (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, 145 L. Ed. 2d 1060, 120 S. Ct. 1073 (2000), and we
doubt that the present statute meets that standard.
A-9
The Constitution includes two clauses prohibiting [**12]
enactment 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
[*346] prohibitions in § 9 and § 10, has been aptly described
elsewhere, and we see no need to reiterate it here. See In re
Extradition of McMullen, 989 F.2d 603, 604-06 (2d Cir. 1993)
(in banc). Briefly stated, a constitutionallyproscribed 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’ of Gen. Servs., 433 U.S. 425, 468, 53 L. Ed. 2d 867, 97
S. Ct. 2777 (1977); see also United States v. Lovett, 328 U.S.
303, 315, 90 L. Ed. 1252, 66 S. Ct. 1073, 106 Ct. Cl. 856 (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, the
Clause bars the imposition [**13} of punishment resulting
from “trial by legislature.” United States v. Brown, 381 U.S.
437, 442, 14 L. Ed. 2d 484, 85 S. Ct. 1707 (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
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, 14 L. Ed. 2d 484, 85 S. Ct. 1707 (1965);
Fletcher v. Peck, 10 U.S. (6 Cranch) 87, 138, 3 L. Ed. 162 (1810)
(Marshall, C.J.) (“A bill of attainder may affect the life of an
individual, or may confiscate his property, or may do both.”).
A-10
trial.” Nixon, 433 U.S. at 468. In the present case, the lack of
[**14] 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
””
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, 81 L. Ed. 835, 57 S.
Ct. 549 (1937); see also Mayor of Phila. v. Educ. Equal. League, 415
U.S. 605, 615 n.13, 39 L. Ed. 2d 630, 94 S. Ct. 1323 (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, 1 L. Ed. 2d 1311, 77 S. Ct. 1203 (1957)
(Frankfurter, J., concurring)); Dreyer v. Illinois, 187 U.S. 71, 84, 47
L. Ed. 79, 23 S. Ct. 28 (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).
—=-- ss thn
Se ef .
[**15]
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, 4
L. Ed. 629 (1819), a [*347] 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, 84 L. Ed. 2d 751, 105
S. Ct. 1676 (1985) (equal protection); Marshall v. Barlow’s,
Inc., 436 U.S. 307, 56 L. Ed. 2d 305, 98 S. Ct. 1816 (1978)
(reasonable search and seizure); United States v. Martin
Linen Supply Co., 430 U.S. 564, 51 L. Ed. 2d 642, 97 S. Ct.
1349 (1977) (double jeopardy); Va. State Bd. of Pharmacy v.
Va. Citizens Consumer Council, Inc., 425 U.S. 748, 48 L. Ed.
2d 346, 96 S. Ct. 1817 (1976) (freedom of speech).
Nevertheless, [**16] 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, 94 L. Ed. 401, 70 S. Ct. 357, 46 F.T.C. 1436 (1950)
(privacy); Wilson v. United States, 221 U.S. 361, 382-86, 55 L.
Ed. 771, 31 S. Ct. 538 (1911) (Fifth Amendment 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, 55 L. Ed. 2d 707,
A-12
98 S. Ct. 1407 (1978). Whether a right is purely personal
“depends on [its] nature, history, and purpose.” Id.
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
[**17], those who are peculiarly vulnerable to nonjudicial
determinations of guilt,” South Carolina v. Katzenbach, 383
US. 301, 324, 15 L. Ed. 2d 769, 86 S. Ct. 803 (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, 131 L. Ed. 2d 328, 115 S. Ct. 1447 (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, 338 U.S. App. D.C. 213,
192 F.3d 1050, 1065 (D.C. Cir. 1999); SBC Communications
Inc. v. FCC, 154 F.3d 226, 234 & n.11 (5th Cir. 1998). [**18]
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
Pe Set) ie eee Sw ae a ee ”
NL aad pn VE Raine Caelb le AB Pa A Met Mohs Rd
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Wall.) 277, 323, 18 L. Ed. 356 (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,
89 L. Ed. 1495, 65 S. Ct. 1031 (1945) (stating that “it is plain
that basic to the concept of [*348] 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.
[**19] See, e.g., Helicopteros Nacionales de Colom., S.A. v.
Hall, 466 U.S. 408, 413-19, 80 L. Ed. 2d 404, 104 S. Ct. 1868
(1984).5
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-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 [**20] 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
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).
A-14
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 inflicting 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 [**21] 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
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 [**22] persons. See, e.g., 1 & 2 Geo.
4, c.47 (Eng. 1821). Moreover, one of the types of
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punishment most frequently imposed by bills of pains and
penalties, punitive confiscation of private property, see
Selective [*349] Serv. Sys. v. Minn. Pub. Interest Research
Group, 468 U.S. 841, 852, 82 L. Ed. 2d 632, 104 S. Ct. 3348
(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, 106 L. Ed.
2d 219, 109 S. Ct. 2909 (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
“individuals,” 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.
B. Retrospective Focus: Guilt
Another indispe sable element of a bill of attainder is its
retrospective focus: it defines past conduct as wrongdoing
and then imposes punishment [**23] 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, 4 L. Ed. 2d 1109, 80 S. Ct. 1146
(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
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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 [**24] 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 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 [**25] to the rates of a single utility, is
considerably broader than their authority to act
retrospectively.
ll 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
USS. at 471-72 & n. 33 [*350] (holding that “the Act’s
specificity — the fact that it refers to appellant by name —
A-17
does not automatically 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
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 [**26] 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, 4
L. Ed. 2d 1435, 80 S. Ct. 1367 (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 [**27] 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
A-18
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.””).
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 [**28] 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.” Id. 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.
[*351]
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].” Id. at 473. Some types of
legislatively imposed harm, in other words, are considered
A-19
to be punitive per se. The classic example is death, but
others include “imprisonment, banishment, . . . the punitive
confiscation of property[, and prohibition of] designated
individuals or groups from participation in specified [**29]
employments or vocations.” Id. 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
thata “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, 102 L. Ed. 2d 646, 109 S. Ct.
609 (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.
[**30] 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.
2. The “Functional” Test: Nonpunitive Statutory Goals
The second component of the Supreme Court’s test is
“functional,” looking to
A-20
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 Trop v. Dulles, 356
U.S. 86, 97, 2 L. Ed. 2d 630, 78 S. Ct. 590 (1958) (plurality
opinion)); Brown, 381 U.S. at 476 (White, J., dissenting)
(“The imposition of a particularly harsh [**31] 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 [*352] 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 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
ratepayers 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 [**32] to do with the
A-21
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 ina
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
USS. 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, [**33] 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
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 ina
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
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
(5th ed. 1984).
A-22
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, 105 L. Ed. 2d 298, 109 S. Ct. 2506 (1989) [**34]
(“[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, 76 L. Ed. 2d 1, 103 S. Ct.
1905 (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 [*353] of nuclear power
generation has been occupied by Congress through the
Atomic Energy Act, 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, 75 L. Ed. 2d 752, 103
S. Ct. 1713 (1983); Suffolk County v. Long Island Lighting
Co., 728 F.2d 52, 59-60 (2d Cir. 1984). [**35] 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
A-23
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
[**36] course of business at any time after they received
them in 1985. To install new generators, Con Ed must take
IP2 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 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 orcinarily 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
tobe 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 [**37] 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-
A-24
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 accidental outage? Neither of the legitimate [*354]
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
[**38] 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
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.
A-25
cost [**39] 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 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 government
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 [**40]
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 U.S. 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 (“[O]nly the clearést 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
A-26
(recounting extensive evidence of punitive intent in the
legislative record). Statements by a smattering of legislators
“do not constitute [the required] unmistakable evidence of
punitive intent.” Selective Serv. Sys., 468 U.S. at 856 n.15
(internal quotations omitted). Although the evidence of
[*355] punitive intent in the legislative record in this case is
insufficient on its own to [**41] 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
overwhelming 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 [**42] 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.
D. Severability
A-27
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 [**43] 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 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).
A-28
II. Scrivener’s Error in the Judgment
Although we affirm, we must remand to the district
court with direction [**44] to correct [*356] 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.
APPENDIX B
B-1
CONSOLIDATED EDISON COMPANY OF NEW YORK,
INC., Plaintiff, vs. GEORGE E. PATAKL, 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 Public Service Commission; and THOMAS J.
DUNLEAVY, JAMES D. BENNETT, LEONARD WEISS and
NEAL N. GALVIN in their official capacities 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.
00-CV-1230 (LEK)(RWS)
UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF NEW YORK
117 F. Supp. 2d 257; 2000 U.S. Dist. LEXIS 14985
October 10, 2000, Decided
October 10, 2000, Filed
DISPOSITION: [**1] Plaintiff’s motion for permanent
injunction GRANTED; Plaintiff’s motion for preliminary
injunction DENIED as moot.
COUNSEL: For CONSOLIDATED EDISON COMPANY OF
NEW YORK, INC., plaintiff: Charles E. McTiernan, Jr., phv,
Richard J. Giglio, Stephen Brewi, Scott Levinson,
Consolidated Edison Company of New York, Inc., New
York, NY.
For GEORGE E. PATAKI, defendant: Edward M. Scher,
AAG, Office of Attorney General, State of New York, Jeffrey
B-2
P. Mans, State of New York, Office of the Attorney General,
Litigation Bureau, Albany, NY.
For MAUREEN O. HELMER, THOMAS J. DUNLEAVY,
JAMES D. BENNETT, LEONARD A. WEISS, NEAL N.
GALVIN, defendants: Kevin M. Lang, New York State
Public Service Commission, Department of Public Service,
Albany, NY.
For RICHARD L. BRODSKY, SHELDON SILVER,
intervenors-defendants: William F. Collins, New York State
Assembly, Office of Counsel to the Majority, Albany, NY.
JUDGES: Hon. Lawrence E. Kahn, United States District
Judge.
OPINION BY: Lawrence E. Kahn
OPINION: [*260]
MEMORANDUM - DECISION AND ORDER
Presently before the Court is Plaintiff's motion for a
preliminary and permanent [*261] injunction enjoining
enforcement of Chapter 190 of the Laws of 2000.1 For the
1 In relevant part, the law states:
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 ...
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
B-3
reasons set forth below, Plaintiff's motion for a permanent
injunction is GRANTED and its motion for a preliminary
injunction is DENIED as moot.
"21
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
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 [**3]
generators purchased in 1988. Until these replacement
shall prohibit the Consolidated Edison Company from
recovering from its ratepayers any costs associated with
replacing the power from such facility ... [S]uch prohibition
shall apply to the automatic adjustment mechanisms as well as
base rates or any other recovery mechanism.
B-4
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).
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 [**4] 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”) [*262] following the PSC’s determination not to
B-5
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 [**5] has asked this Court for a preliminary and
permanent injunction enjoining enforcement of the Indian
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, 87 L. Ed. 2d 313, 105 S. Ct.
3249 (1985) (citing Plyler v. Doe, 457 U.S. 202, 216, 72 L. Ed.
2d 786, 102 S. Ct. 2382 (1982)). Legislation that does not
restrict a fundamental right or employ a suspect
B-6
classification, like the social and economic legislation at
issue [**6] 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, 134 L. Ed. 2d 855, 116 S. Ct. 1620 (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 Creamery Co., 449 U.S. 456, 469, 66 L. Ed. 2d
659, 101 S. Ct. 715 (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, 37-L. Ed. 2d 782,
93 S. Ct. 2821 (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 [**7] of the Food Stamp Act); see generally Zobel
v. Williams, 457 U.S. 55, 72 L. Ed. 2d 672, 102 S. Ct. 2309
(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, 6 L. Ed. 2d
393, 81 S. Ct. 1101 (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, 138 L.
Ed. 2d 834, 117 S. Ct. 2293 (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
B-7
similarly situated persons are treated differently, it [*263]
must strike down the statute. See Reed v. Reed, 404 U.S. 71,
76, 30 L. Ed. 2d 225, 92 S. Ct. 251 (1971); see also, F.S. Royster
Guano Co. v. Virginia, 253 U.S. 412, 415, 64 L. Ed. 989, 40 S.
Ct. 560 (1920). [**8]
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, 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 Election, 394 U.S. 802, 809,
89 S. Ct. 1404, 22 L. Ed. 2d 739 (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, satety 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 [**9] 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 hea’'h,
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-8
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. Robison, 415 U.S. 361,
376, 39 L. Ed. 2d 389, 94S. Ct. 1160 (1974). As long as the
purposes of the statute can be 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, 81
L. Ed. 2d 186, 104 S. Ct. 2321 (1984) (quoting Berman v.
Parker, 348 U.S. 26, 32, 99 L. Ed. 27, 75 S. Ct. 98 (1984). [**10]
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, 102 L. Ed. 2d 646, 109 S.
Ct. 609 (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
B-9
A classification is rationally related to a legitimate
government interest [*264] as long as it does not [**11] place
persons into “different classes on the basis of criteria wholly
unrelated to 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. Id. (quoting F.S. 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. [**12] 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
of a specific model of generator. In essence, Defendants
want this Court to accept the premise that because only
B-10
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 [**13] 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.
Moreover, this Court notes that there is some evidence
to indicate that the articulated purpose underlying this
arbitrary classification is a mere pretext (**14] 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
B-11
high rates.? If this legislative classification was upheld on
the ground that punishing Plaintiff was rationally related to
the statute’s purposes, [*265] 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 [**15]
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, 93 L. Ed. 533, 69 S. Ct. 463 (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
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.
2 The punitive purpose of Chapter 190 is discussed below in
Part III. B.
B-12
III. Bill of Attainder
Plaintiff also argues [**16] 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, 53 L. Ed. 2d 867, 97 S. Ct. 2777 (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, 14 L. Ed. 2d 484, 85 S. Ct. 1707 (1965). [**17]
However, the Supreme Court has held that:
the Bill of Attainder Clause was intended not as a
narrow, technical (and therefore soon to be outmoded)
prohibition, but rather as an implementation 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
3 Article I, Section 9, applicable to Congress, states that “[nJo
Bill of Attainder or ex post facto Law shall be passed.” Section 10
applies the same rule to the States.
B-13
appropriate punishment upon, specific persons.”4 Brown,
381 U.S. at 445; [*266] see also McMullen v. United States,
989 F.2d 603, 607 (2d Cir. 1993).
[**18]
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, 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:
the 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
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, 131 L. ed. 2d 328, 115 S. Ct. 1447
(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.
B-14
authority and perform the functions of the other
departments. [**19]
Brown, 381 U.S. at 443-44, 14 L. Ed. 2d 484, 85 S. Ct. 1707
(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 ioined 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.
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.” Id. at 446. Hence, the Supreme [**20] 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, 3 L. Ed. 162 (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
B-15
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 [**21] of attainder,
the Court must determine whether the challenged law
inflicts punishment on specifically designated individuals or
entities without the benefit of judicial trial. See Brown, 381
US. at 448-49 (citing United States v. Lovett, 328 U.S. 303,
315-16, 90 L. Ed. 1252, 66 S. Ct. 1073 (1946)). In other words,
a law is a bill of attainder if it satisfies “a [*267] 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, 104 S. Ct. 3348,
82 L. Ed. 2d 632 (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, 6 L Ed. 2d 625, 81 S. Ct. 1357 (1961)). [**22]
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
B-16
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.
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, 4 L. Ed. 2d 1435, 80 S. Ct. 1367 (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 [**23] challenged statute falls within the historical
meaning of legislative punishment; (2) whether the statute,
‘viewed in terms of the type 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.
B-17
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.
In Long Island lighting Co., this [**24] Court observed
that the Bill of Attainder Clause:
has been applied only to legislation closely —e
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 [*268] interests. 666 F.
Supp. 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
[**25] 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.
Plaintiff, of course, cannot argue that it is a “political
group thought to present a threat to national security.”
B-18
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 [**26] 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, notjust 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 constititional overreaching
by any stretch of the imagination, is clearly politically
unpopular. This is particularly so whenit is accused of
exposing the public to the risk of nuclear leaks and of
unjustly passing along millions of dollais in resultant costs
to the [**27] 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 attander.
B-19
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 [*269] further
nonpunitive legislative purposes.” Id. at 475-76. [**28] 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.
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
B-20
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 [**29] punishment,
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 “[i]n 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.”
Id. 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.
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” [**30] 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
B-21
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
[**31]
[*270] 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, rehabilitative, 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 subsurned the powers of all three
branches of government.
> For example, 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.
B-22
Finally, it is critical to note that counsel for defendant
PSC acknowledged at oral argument tnat, 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 [**32] 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 allowed 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.
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 [**33] “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, 14 L. Ed. 2d 484, 85 S. Ct. 1707. In short, the
B-23
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
Clause and the Bill of Attainder Clause, Defendants are
enjoined from taking any action to implement or enforce
Chapter 190.
[**34]
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
[*271] ORDERFD 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.
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.
B-24
IT IS SO ORDERED.
Hon. Lawrence E. Kahn
United States District Judge
Dated: October 10, 2000
Albany, New York
APPENDIX C
C-]
ARTICLE I, SECTION 10 OF THE CONSTITUTION OF THE
UNITED STATES
Section 10. No State shall enter into any Treaty, Alliance, or
Confederation; grant Letters of Marque and Reprisal; coin
Money; emit Bills of Credit; make any Thing but gold and
silver Coin a Tender in Payment of Debts; pass any Bill of
Attainder, ex post facto Law, or Law impairing the
Obligation of Contracts, or grant any Title of Nobility.
No State shall, without the Consent of the Congress, lay any
Imposts or Duties on Imports or Exports, except what may
be absolutely necessary for executing its inspection Laws:
and the net Produce of all Duties and Imposts, laid by any
State on Imports or Exports, shall be for the Use of the
Treasury of the United States; and all such Laws shall be
subject to the Revision and Control of the Congress.
No State shall, without the Consent of Congress, lay any
Duty of Tonnage, keep Troops, or Ships of War in time of
Peace, enter into any Agreement or Compact with another
State, or with a foreign Power, or engage in War, unless
actually invaded, or in such imminent Danger as will not
admit of delay.
ee ere ant? Sct ciel etnies, «
APPENDIX D
D-1
CHAPTER 190 OF THE LAWS OF 2000
LAWS OF NEW YORK, 22382 LEGISLATIVE SESSION
VOLUME III, PAGES 2799-2800
[*2799] AN ACT prohibiting the recovery of costs in
connection with a radiation leak at the Indian Point 2
Nuclear Facility on February 15, 2000
Became a law August 8, 2000, with the approval of the
Governor.
Passed by a majority vote, three-fifths being present.
The People of the State of New York, represented in Senate
and Assembly, do enact as follows:
Section 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 [*2800] to recover from ratepayers any costs
resulting from the February 15, 2000 outage at the Indian
Point 2 Nuclear Facility.
§ 2. With respect to
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