William B. Newton v. Duke Energy Florida, LLC
Opinion
In 2006, the Florida Legislature enacted the Florida Renewable Energy Technologies and Energy Efficiency Act
1
(the "Act"). The Act authorized the Florida Public Service Commission ("PSC") to create a plan to incentivize energy utilities to invest in nuclear power plant construction.
This is a putative class action. The plaintiffs' class representatives, William Newton and Noreen Allison ("Plaintiffs"), claim that two provisions of the Act which authorize the NCRS, Florida Statutes §§ 366.93 and 403.519(4), are invalid under the Dormant Commerce Clause ("DCC"), which precludes a state from "regulat[ing] Commerce ... among the several States," U.S. Const. art. I, § 8, cl. 3, and "directly limits the power of the States to discriminate against interstate commerce."
New Energy Co. of Ind. v. Limbach
,
Plaintiffs did not bring these claims against the State of Florida, the PSC (which is charged with implementing and administering the Act), or its members. Instead, they seek the Act's invalidation solely by suing two electric utilities, Duke Energy Florida and Florida Power & Light ("Utilities"), who have been collecting rate increases from them and their class members for nuclear plant construction that has been discontinued.
Utilities separately moved the District Court to dismiss Plaintiffs' claims pursuant to Federal Rule of Civil Procedure 12(b)(6) on numerous grounds. As to the DCC claim, Utilities argued that if a cause of action lies under the DCC, it belongs to the States that may have been injured due to Florida's regulation of interstate commerce and not to Plaintiffs, who are Florida utility customers. Utilities also argued that they are private parties, not state actors, and, as such, could not have violated the DCC. As to the preemption claims, Utilities argued that they failed for numerous reasons, including that preemption is a defense , not a claim for relief. 5 Utilities *1274 also argued that the preemption claims failed on the merits.
The District Court dismissed Plaintiffs' DCC claim for lack of "prudential standing" because Plaintiffs were not in the "zone of interests" protected by the Clause.
6
See
Harris v. Evans
,
Plaintiffs moved the District Court for reconsideration pursuant to Federal Rule of Civil Procedure 60(b). The motion focused on the Court's dismissal of their claims without leave to amend. Citing Federal Rule of Civil Procedure 15(a)(2), which states that "[t]he court should freely give leave [to amend] when justice so requires," Plaintiffs argued that they could cure the deficiencies in their complaint if given leave to join the State of Florida as a defendant and to prosecute their claims against Utilities under
The District Court denied the Rule 60(b) motion. Its reading of the motion was that Plaintiffs were seeking to bolster their claims against Utilities by joining the State as a defendant. This would be futile. "Simply joining the State as a party," the Court explained, "would not suddenly empower Plaintiffs to bring constitutional claims against private entities, such as [Utilities]." Dist. Ct. Ord. Denying Mot. for Reconsideration at 4. The Court did not expressly respond to Plaintiffs' request to bring their DCC claim against Utilities under § 1983, but it implicitly rejected the request in stating that Utilities were not acting under color of state law in participating in the NCRS.
Plaintiffs appeal the District Court's judgment, arguing that the allegations of their complaint were sufficient to make out their DCC claim and their preemption claim under the Atomic Energy Act. 8 They also appeal the Court's denial of their Rule 60(b) motion, arguing that the Court abused its discretion in denying the request for leave to amend asserted in the motion.
I.
We review
de novo
the dismissal of a claim under
*1275
Federal Rule of Civil Procedure 12(b)(6).
Caver v. Cent. Ala. Elec. Coop.
,
II.
A.
The "modern law" of the DCC is "driven by concern about 'economic protectionism,' " or, in other words, "regulatory measures designed to benefit in-state economic interests by burdening out-of-state competitors."
Dep't of Revenue of Ky. v. Davis
,
This is far from the case here. Plaintiffs are Florida electric utility customers. Utilities are Florida companies. Utilities are not "states" such that their actions could give rise to DCC claims from an out-of-state person or entity. Plaintiffs' interests are well beyond the zone the DCC is meant to protect.
9
See
Harris
,
B.
Next, we turn to Plaintiffs' preemption claim. It is well-settled that there are three types of preemption:
First, Congress has the authority to expressly preempt state law by statute. Second, even in the absence of an express preemption provision, the scheme of federal regulation may be so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it. Third, federal and state law may impermissibly conflict, for example, where it is impossible for a private party to comply with both state and federal law, or when the state law at issue stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.
Graham v. R.J. Reynolds Tobacco Co.
,
A claim that a plaintiff asserts under state law, in a field that is completely preempted, necessarily arises under federal
*1276
law.
See, e.g.
,
Borrero v. United Healthcare of N.Y., Inc.
,
Therefore, we address the merits of the claim. In
Pacific Gas & Electric Co. v. State Energy Resources Conservation & Development Commission
,
Where, as here, the federal government has occupied a portion of a given field, "the test of preemption is whether the matter on which the state asserts the right to act is in any way regulated by the federal government."
Id.
at 213, 103 S.Ct. at 1727 (citation and internal quotation marks omitted). The NCRS is based on an economic rationale-whether flawed or not-that utilities like Duke Energy Florida and Florida Power & Light should be able to recoup from their customers the costs associated with a project for the construction of a nuclear power plant, and that they should not have to return the funds received even if the project is not completed.
See
Smalley v. Duke Energy Fla., Inc.
,
Plaintiffs point to no cases holding (nor authorities suggesting) that state laws promoting investment in new nuclear plants, or shifting the costs of nuclear plant construction, are preempted by the Atomic Energy Act. That failure is not surprising given the language of
*1277
Plaintiffs do cite
C.
Finally, we consider whether the District Court abused its discretion in denying Plaintiffs' request for leave to amend their complaint. Plaintiffs first expressed a desire to amend the complaint in the memorandum they filed in opposition to Duke Energy Florida's Rule 12(b) motion to dismiss. In the event the Court granted Utilities' motions, they said, the Court should give them leave to amend their DCC claim in order to seek relief under § 1983 on the theory that Utilities were acting under color of state law in raising their electricity rates.
Standing alone, the request possessed no legal effect for two reasons. First, "[w]here a request for leave to file an amended complaint simply is imbedded within an opposition memorandum, the issue has not been raised properly."
Cita Tr. Co. AG v. Fifth Third Bank
,
Plaintiffs did request leave to amend in their Rule 60(b) motion. The question arises as to whether the request they made in opposing the Rule 12(b)(6) dismissal of the DCC claim provided any support for the request they made in the Rule 60(b) motion. The answer is no. The request made in opposing the motion to dismiss the DCC claim is irrelevant. But did Plaintiffs' inclusion of a request for leave to amend within their Rule 60(b) motion comport with the Rule 7(b) motion requirement? Yes.
See
Almanza v. United Airlines, Inc.
,
Was the request for leave to amend legally sufficient? That depends on what the request did or did not contain. When moving the district court for leave to amend its complaint, the plaintiff must "set forth the substance of the proposed amendment or attach a copy of the proposed amendment" to its motion.
Cita Tr.,
First, Plaintiffs could have cured the state action defect by naming the State as a defendant to their Commerce Clause challenge, or the Court itself could have simply ordered the State to join the lawsuit. Plaintiffs also could have amended the Complaint to include allegations that Defendants acted under color of law. The state action requirement of § 1983 is satisfied by the State of Florida's active encouragement of Defendants' participation in the Nuclear Cost Recovery Statute (NCRS) to fulfill state energy goals.
Plaintiffs' Mot. for Reconsideration at 2. On its face, this statement barely scratches the surface of what Plaintiffs' amended complaint would state. It merely hypothesizes, in broad strokes, the kinds of amendments that Plaintiffs
might
have been able to make. It clearly does not satisfy
Cita Trust
's requirement. In addition, neither the State of Florida nor its agencies could be named in or added to the lawsuit without violating the Eleventh Amendment, and neither the State of Florida nor its agencies are "persons" within the meaning of § 1983.
Will v. Mich. Dep't of State Police
,
III.
There is no merit in Plaintiffs' appeal. Plaintiffs' complaint failed to state a claim for relief. Fed. R. Civ. P. 12(b)(6). The judgment of the District Court is accordingly affirmed.
AFFIRMED.
2006 Fla. Laws ch. 230.
The original "Nuclear Power Plant Cost Recovery" regulation became effective on April 8, 2007. Since then, the regulation has been amended twice, most recently pursuant to changes to the Act that were passed by the Florida Legislature in 2013.
See
The Atomic Energy Act was one of Congress's earliest steps to establish the "dual regulation of nuclear-powered electricity generation" in which "the federal government maintains complete control of the safety and 'nuclear' aspects of energy generation" while "the states exercise their traditional authority over the need for additional generating capacity, the type of generating facilities to be licensed, land use, ratemaking, and the like."
Pac. Gas & Elec. Co. v. State Energy Res. Conservation & Dev. Comm'n
,
Plaintiffs invoked the District Court's federal question jurisdiction.
Plaintiffs do not assert a claim for relief under the Atomic Energy Act or the Energy Policy Act.
Although the District Court did not state whether the dismissal of the DCC claim was pursuant to Federal Rule of Civil Procedure 12(b)(1) or 12(b)(6), we treat it as having been made under Rule 12(b)(6). The Supreme Court's decision in
Lexmark International, Inc. v. Static Control Components, Inc.
,
The District Court dismissed these claims under Federal Rule of Civil Procedure 12(b)(6).
Plaintiffs also appeal the dismissal of their unjust enrichment claim. See supra note 4. Plaintiffs do not appeal the District Court's dismissal of their preemption claim based on the Energy Policy Act.
We do not mean to say that an in-state plaintiff can
never
assert a DCC claim against its own state's law or regulation. That would be incorrect.
See, e.g.,
Fla. Transp. Servs., Inc. v. Miami-Dade Cty.
,
The Pacific Gas Court also described the balance between state and federal regulation of nuclear energy production that the Atomic Energy Act codified. See supra note 3.
We held in
Liesen v. Louisiana Power & Light Co.
,
Reference
- Full Case Name
- William B. NEWTON, Noreen Allison, Individually and on Behalf of All Others Similarly Situated, Plaintiffs-Appellants, v. DUKE ENERGY FLORIDA, LLC, a Florida Limited Liability Company, Florida Power & Light Company, a Florida Profit Corporation, Defendants-Appellees.
- Cited By
- 131 cases
- Status
- Published