United States Court of Appeals
For the First Circuit
No. 07-2322
JENNY M. GREENWOOD,
Executor of the Estate of Alden T. Greenwood,
Plaintiff, Appellee.
v.
NEW HAMPSHIRE PUBLIC UTILITIES COMMISSION,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Steven J. McAuliffe, U.S. District Judge]
Before
Lynch, Circuit Judge,
Tashima,* Senior Circuit Judge,
and Lipez, Circuit Judge.
Mary E. Maloney, Assistant Attorney General, New Hampshire
Department of Justice, with whom Kelly A. Ayotte, Attorney General,
was on brief for appellant.
Thomas J. Donovan with whom Sarah B. Knowlton, Joel T. Emlen,
and McLane, Graf, Raulerson & Middleton, Professional Association
were on brief for appellee.
May 15, 2008
*
Of the Ninth Circuit, sitting by designation.
LYNCH, Circuit Judge. This case was brought by the owner
of a small renewable hydroelectricity producing company, Alden
Greenwood, who in 2006 sued the New Hampshire Public Utilities
Commission ("PUC") over an order the PUC had issued more than
seventeen years earlier in May of 1988 (and declined to reconsider
in later orders). The PUC said it issued the order under section
210 of the Public Utility Regulatory Policies Act ("PURPA" or "the
Act") of 1978, 16 U.S.C. § 824a-3. The 1988 order rescinded the
final ten years of a thirty-year (1985-2015) rate schedule which
the PUC had earlier approved in an order it issued in 1985.
The district court in 2007 enjoined the PUC from
enforcing its 1988 order, in effect reinstating the final ten years
of the original rate schedule, which had approved terms favorable
to Greenwood in its contract with the Public Service Company of New
Hampshire. Greenwood v. N.H. Pub. Utils. Comm'n, No. 06-cv-270,
2007 WL 2108950 (D.N.H. July 19, 2007). The underlying amount
involved is at least $4.3 million.
We reverse and order dismissal of the case.
I.
In 1978, in the midst of a nationwide energy crisis,
Congress passed PURPA, a series of measures designed to reduce the
nation's dependence on fossil fuels. See FERC v. Mississippi, 456
U.S. 742, 745-46 (1982). Section 210 of PURPA sought to "encourage
the development of cogeneration and small power production
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facilities." Id. at 750; see 16 U.S.C. § 824a-3(a). Congress felt
"that two problems impeded the development of nontraditional
generating facilities: (1) traditional electricity utilities were
reluctant to purchase power from, and to sell power to, the
nontraditional facilities, and (2) the regulation of these
alternative energy sources by state and federal utility authorities
imposed financial burdens upon the nontraditional facilities and
thus discouraged their development." FERC, 456 U.S. at 750-51.
The Act required the Federal Energy Regulatory Commission ("FERC"
or "the Commission") to promulgate rules implementing the statute,
in particular, rules requiring utilities to enter into purchase and
sale agreements with qualifying cogeneration and small power
production facilities ("QFs"). 16 U.S.C. § 824a-3(a); see id.
§ 796(17)-(18) (defining QFs). These rules, which regulate the
rates of purchase and sale, are to be implemented by state
utilities commissions. Id. § 824a-3(f)(1); see FERC, 456 U.S. at
751. PURPA requires FERC to prescribe rules exempting QFs from
certain state and federal energy regulations. 16 U.S.C. § 824a-
3(e); FERC, 456 U.S. at 751.1
1
PURPA also provides an overlapping scheme of federal and
state judicial review of state regulatory action taken pursuant to
PURPA: federal court review after the exhaustion of a request to
FERC for enforcement and state court review of state PUC orders in
state court. See 16 U.S.C. § 824a-3(g)(1), (h)(2)(B).
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The constitutionality of PURPA, including specifically
the role of state agencies in implementing the FERC rules, was
upheld by the Supreme Court. See FERC, 456 U.S. at 758-61.
In 1984, in order to "fulfill[] the [PUC's]
responsibility under PURPA to set just and reasonable rates for
sales of electric power to public utilities," the New Hampshire PUC
issued a generic rate order "updating and establishing the short
term and long term rates to be paid by Public Service Company of
New Hampshire . . . to small power producers and cogenerators." Re
Small Energy Producers and Cogenerators (Order No. 17,104), 69
N.H.P.U.C. 352, 353, 356 (July 5, 1984) [hereinafter "Generic Rate
Order"].
In August 1985, the PUC approved Greenwood's2 application
under the Generic Rate Order for a thirty-year, long-term avoided
cost rate structure, from September 13, 1985 through September 13,
2015, for Greenwood's three 150-kilowatt hydroelectric plants:
Waterloom Falls, Otis Falls, and Chamberlain Falls. Alden T.
Greenwood d/b/a Alden Eng'g Co. (Order No. 17,814), ___ N.H.P.U.C.
___ (Aug. 13, 1985). All three plants are QFs for the purposes of
PURPA. As a result of this rate approval, Greenwood and the Public
Service Company of New Hampshire ("PSNH") entered into
interconnection agreements under which PSNH agreed to compensate
2
Greenwood died in 2007. His estate was substituted as a
plaintiff in the case.
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Greenwood for electricity produced by those three plants at the
rate provided in the PUC Generic Rate Order and Greenwood's
approval order. This meant PSNH would pay Greenwood approximately
$0.06 per kilowatt-hour of electricity generated by his three
plants in the first year, and that rate would increase each year,
culminating in a rate of $0.7174 per kilowatt-hour in the thirtieth
year.3 PSNH would also pay capacity charges increasing from $56.07
per kilowatt-year in the first year to $367.70 per kilowatt-year in
the final year.
In May of 1988, the PUC reconsidered its 1985 order. Re
Alden T. Greenwood (Order No. 19,095), 73 N.H.P.U.C. 228 (May 19,
1988). It concluded that it had made a mistake in the 1985 order,
and that it had not, as PURPA and the FERC rules required, treated
Greenwood's three QFs in a manner "consistent . . . for facilities
that are similarly circumstanced." Id. at 229. In addition, its
1985 rate design was "not just and reasonable to the electric
consumers of the electric utility and in the public interest, as
required by PURPA and the FERC rules." Id. Thus, the PUC's stated
reason for altering the earlier order was that it was required to
do so to comply with the federal PURPA statute and the FERC
regulations. The PUC rescinded the final ten years of the 1985
3
PSNH is not a party to this litigation. It agreed to be
bound by any order relating to the rate at which it is obligated to
compensate Greenwood for electricity produced at his three
hydroelectric plants because that cost will be included in its own
rate base.
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rate order applicable to Greenwood's three plants, reducing it to
twenty years. Id. This meant Greenwood lost the previously
approved rate for the ten-year period from September 2005 through
September 2015 in his contract with PSNH. Greenwood, of course,
had no contract with the PUC.
When Greenwood learned of the 1988 rescission order, he
moved for reconsideration before the PUC and was given a hearing on
November 28, 1988. Following that hearing, the PUC on December 9,
1988 issued Order Number 19,257, denying Greenwood's motion for
reconsideration. Re Alden T. Greenwood, d/b/a Alden Eng'g Co.
(Order No. 19,257), 73 N.H.P.U.C. 504 (Dec. 9, 1988). Greenwood
did not at that time challenge the authority of the PUC to enter
the 1988 rescission order. Nor did he claim the order was
preempted by or inconsistent with PURPA. To the contrary, the PUC
found that at the hearing Greenwood "conceded that the commission
had acted within its authority in issuing the rescission order, and
did not contest the merits of the order." Id. Accordingly, the
PUC let stand its 1988 order rescinding the last ten years of
Greenwood's rate order.
Greenwood did not appeal that 1988 decision to the New
Hampshire Supreme Court, as he was permitted to do. See 16 U.S.C.
§ 824a-3(g); N.H. Rev. Stat. Ann. § 541:6. Nor did he petition
FERC to bring an enforcement proceeding, see 16 U.S.C. § 824a-
3(h)(2)(B), or file suit in federal court asserting that the PUC's
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order was preempted by PURPA, a claim the plaintiff now makes in
this suit.
Nearly seventeen years later, on September 15, 2005, as
the first twenty years of his rate schedule were about to expire,
Greenwood filed a petition with the PUC seeking a declaratory
ruling that: (1) the PUC's 1988 rescission order violated the
provisions of PURPA and the pertinent FERC regulations; and (2) the
PUC's original 1985 approval of his rate schedule remains in full
force and effect for its entire thirty-year term. He asserted that
PURPA and pertinent FERC regulations divested the PUC of the
authority it exercised in 1988 to rescind the Generic Rate Order of
1985. The PUC on April 13, 2006, denied Greenwood's petition,
concluding that the doctrine of res judicata prevented him from
revisiting the issues the PUC resolved against him nearly seventeen
years earlier. Re Alden T. Greenwood dba Alden Eng'g Co. (Order
No. 24,613), 91 N.H.P.U.C. 170 (Apr. 13, 2006).
Greenwood moved for reconsideration, asserting that res
judicata was inapplicable because the PUC had lacked the authority
in 1988 to act as it did. On June 22, 2006, the PUC rejected that
argument, concluding that Greenwood had waived his right to pursue
his claim in a federal forum and had voluntarily submitted himself
to the jurisdiction of the PUC. Re Alden T. Greenwood dba Alden
Eng'g Co. (Order No. 24,638), 91 N.H.P.U.C. 283 (June 22, 2006).
Greenwood did not appeal that decision to the New Hampshire Supreme
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Court. Instead, Greenwood filed a petition for declaratory and
injunctive relief in federal court on July 21, 2006.
II.
Plaintiff brought this suit, asserting general federal
question jurisdiction under 28 U.S.C. § 1331. The suit claims that
the four PUC orders, from the 1988 rescission order on, were
expressly preempted by PURPA section 210(e), 16 U.S.C. § 824a-3(e),
and FERC's implementing rules, 18 C.F.R. §§ 292.601, 292.602. The
four orders are (1) the 1988 order which modified the 1985 rate
order by limiting Greenwood's rate to twenty years from the
original thirty years; (2) the 1988 order upholding that decision
after a hearing on Greenwood's petition for reconsideration, (3)
the 2006 order denying Greenwood's petition for declaratory
judgment on the basis of res judicata, and (4) the 2006 order
denying Greenwood's motion for reconsideration.
The district court, in a written order on July 19, 2007,
granted summary judgment to plaintiff and enjoined the PUC from
enforcing its 1988 order and the subsequent orders denying
reconsideration. Greenwood, 2007 WL 2108950, at *11. Thus the
court's 2007 order effectively reinstated the final ten years of
the original 1985 rate order, favorable to Greenwood, which the PUC
had rescinded in 1988. The court held that PURPA divested the PUC
of authority to issue the 1988 rescission order, and consequently,
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since the 1988 rescission order was void ab initio, res judicata
did not bar the plaintiff's claim. Id. at *9.
The district court also held that, even though plaintiff
had waited over seventeen years after the 1988 orders were issued
to file suit, the statute of limitations had not yet run. Id. at
*10. The court viewed the most analogous statute of limitations
to be a contract limitation period, subject to the doctrine of
anticipatory repudiation. Because the 1988 order affected only the
last ten years of Greenwood's rate schedule, namely the period
between September 2005 and September 2015, "Greenwood could have
treated the PUC's rescission order as a sort of anticipatory
repudiation of its obligations to him," and brought suit at any
point before September 2006. Id. The court rejected the PUC's
laches defense, finding that plaintiff's delay was not
unreasonable, that the PUC had not suffered any prejudice as a
result of the delay, and that the PUC itself had not acted with
"clean hands." Id.
III.
In its complaint, the plaintiff asserted subject matter
jurisdiction under 28 U.S.C. § 1331. The PUC in its answer
originally did not dispute that federal question jurisdiction under
28 U.S.C. § 1331 exists, and the district court did not, under
those circumstances, inquire further. At oral argument, we asked
the parties to submit supplemental briefs on the question of
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whether the district court had jurisdiction over Greenwood's claim.
The question was whether PURPA section 210 required exhaustion of
remedies before FERC, which admittedly did not occur, as a
prerequisite to filing suit. See 16 U.S.C. § 824a-3(h)(2)(B).
While we would ordinarily reach the jurisdictional
question first, we choose to resolve this case on other grounds.
Although the Supreme Court in Steel Co. v. Citizens for a Better
Environment, 523 U.S. 83, 94 (1998), generally barred the practice
of "hypothetical jurisdiction," this circuit has treated Steel
Co.'s admonition as having limits. See McBee v. Delica Co., 417
F.3d 107, 127 (1st Cir. 2005); Parella v. Ret. Bd. of the R.I.
Employees' Ret. Sys., 173 F.3d 46, 53-56 (1st Cir. 1999). This
court has consistently interpreted the Steel Co. rule as applying
in its strict form only to issues going to Article III
requirements. See McBee, 417 F.3d at 127. Here, where any
concerns over jurisdiction are a matter of statutory interpretation
and not an Article III issue, we may bypass the jurisdictional
inquiry. See, e.g., id.; Cozza v. Network Assocs., 362 F.3d 12, 15
(1st Cir. 2004); Restoration Pres. Masonry v. Grove Europe Ltd.,
325 F.3d 54, 59-60 (1st Cir. 2003); United States v. Woods, 210
F.3d 70, 74 n.2 (1st Cir. 2000); Parella, 173 F.3d at 53-56.
A. Statute of Limitations
We hold the suit is barred by the statute of limitations.
First, Greenwood's seventeen-year delay in challenging the 1988
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order does not comply with the applicable limitations period.
Where, as here, the federal statute contains no statute of
limitations, the court should apply the most analogous statute of
limitations in the state where the action was brought. Wilson v.
Garcia, 471 U.S. 261, 266 (1985); accord Edes v. Verizon Commc'ns,
Inc., 417 F.3d 133, 138 (1st Cir. 2005). The determination of the
most analogous statute of limitations is an issue of law, which we
review de novo. Doyle v. Huntress, Inc., 513 F.3d 331, 335 (1st
Cir. 2008); Villanueva-Méndez v. Nieves-Vázquez, 440 F.3d 11, 15
(1st Cir. 2006).
Greenwood's claim is most analogous to a New Hampshire
law claim of tortious interference with contractual relations, that
is, that the PUC rescission order interfered with Greenwood's
advantageous contractual relationship with PSNH. Such a claim is
governed by New Hampshire's general three-year statute of
limitations. N.H. Rev. Stat. § 508:4 ("[A]ll personal actions . .
. may be brought only within 3 years of the act or omission
complained of . . . ."); see also Singer Asset Fin. Co. v. Wyner,
937 A.2d 303, 312 (N.H. 2007).
Tortious interference with contractual relations requires
the plaintiff to show: "(1) the plaintiff had an economic
relationship with a third party; (2) the defendant knew of this
relationship; (3) the defendant intentionally and improperly
interfered with this relationship; and (4) the plaintiff was
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damaged by such interference." Singer Asset Fin. Co., 937 A.2d at
312 (quoting Hughes v. N.H. Div. of Aeronautics, 871 A.2d 18, 28
(N.H. 2005)) (internal quotation marks omitted). See generally
Restatement (Second) of Torts § 766. Greenwood did not have a
contractual agreement with the PUC; rather, Greenwood had a
contract with a third party, PSNH, which the PUC approved. The PUC
regulated the relationship between the PSNH and Greenwood, but was
not itself a party to Greenwood's and PSNH's contract. Thus, when
the PUC modified the rate order, it did not breach an agreement
that the PUC had entered into with Greenwood, but instead modified
the last ten years of rates in an agreement between Greenwood and
PSNH. Because Greenwood contends that the PUC improperly
interfered with an agreement he had with PSNH, an action for
tortious interference, and not a breach of contract, is most
analogous to the instant action.
It is also clear that this claim accrued in 1988.
"Although the limitations period is determined by state law, the
date of accrual is a federal law question." Carreras-Rosa v.
Alves-Cruz, 127 F.3d 172, 174 (1st Cir. 1997). Federal law
incorporates "the standard rule that [accrual occurs] when the
plaintiff has 'a complete and present cause of action.'" Wallace
v. Kato, 127 S. Ct. 1091, 1095 (2007) (quoting Bay Area Laundry &
Dry Cleaning Pension Trust Fund v. Ferbar Corp., 522 U.S. 192, 201
(1997)); see also Rodríguez-García v. Municipality of Caguas, 354
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F.3d 91, 96-97 (1st Cir. 2004) ("[A] limitations period begins to
run when the plaintiff 'knows or has reason to know of the injury
which is the basis for his claim.'" (quoting Rodriguez-Narvaez v.
Nazario, 895 F.2d 38, 41 n.5 (1st Cir. 1990))).
Greenwood's claim accrued in 1988 when the PUC turned
away Greenwood's challenge to its revision of its 1985 order.
Greenwood both knew of his injury in 1988 and, in his submissions
to the district court, acknowledged that he had suffered two
concrete harms in 1988: the cut in the anticipated stream of income
for the last decade of the rate order and the reduction in the
resale values of the power stations. Therefore, the three-year
limitations period began running in 1988, but no action was brought
until 2005.4
Plaintiff asks us instead to find that plaintiff's claim
is most analogous to a breach of contract action, and that under
the doctrine of anticipatory breach of contract, the three-year
statute of limitations would not begin until September 2005. We do
not reach the question of whether, if this were a contract action,
the anticipatory breach of contract doctrine would apply in these
circumstances to extend the limitations period. See State
Employees' Ass'n v. Belknap County, 448 A.2d 969, 973 (N.H. 1982)
(noting that, under the doctrine of anticipatory breach, a
4
Nothing is added to the plaintiff's claim by the attacks
on the PUC's later orders denying Greenwood's attempts to vacate
the 1988 order.
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plaintiff may elect to bring suit at any time between the other
party's stated intention to breach the contract and the date that
the other party actually becomes obligated to perform a specific
duty under the contract). Here, the claim is not analogous to a
breach of contract action. There was no contract between the PUC
and Greenwood, and Greenwood does not claim that the PUC breached
any sort of agreement.5
B. Equitable Considerations
We also note that even if there were any doubt about the
statute of limitations having expired (and we find none), the
plaintiff's claim for injunctive relief calls upon the equitable
powers of the federal court, and it would be inherently inequitable
to allow this action to go forward and for any relief to be
issued.6 "The principle that the passage of time can preclude
relief has deep roots in our law, and [courts] ha[ve] recognized
this prescription in various guises." City of Sherrill v. Oneida
Indian Nation, 544 U.S. 197, 217 (2005).
5
For the same reasons, we reject plaintiff's argument that
the statute of limitations is tolled because the rate order is akin
to an installment contract.
6
The record contains no evidence that the PUC engaged in
any inequitable "acts [that] in some measure affect the equitable
relations between the parties." Dr. José S. Belaval, Inc. v.
Pérez-Perdomo, 488 F.3d 11, 15 (1st Cir. 2007) (quoting Texaco
P.R., Inc. v. Dep't of Consumer Affairs, 60 F.3d 867, 880 (1st Cir.
1995)) (internal quotation marks omitted). Even if the PUC acted
inequitably, that would not lead us to disregard the harm to third
parties, including consumers.
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In this area of law, FERC itself considers the
plaintiff's delay in bringing suit in deciding whether or not to
pursue an enforcement action under the federal enforcement scheme
set out in section 210. "The appropriate time to challenge a
state-imposed rate is up to or at the time the contract is signed,
not several years into a contract which heretofore has been
satisfactory to both parties." Conn. Light & Power Co., 70
F.E.R.C. 61,012, 61,029 (1995); see Town of Concord v. FERC, 955
F.2d 67, 76 (D.C. Cir. 1992); see also S. Cal. Edison Co., 70
F.E.R.C. 61,215, 61,678 (1995) ("We believe that the appropriate
time in which to challenge a state-imposed rate for a QF purchase
is up to the time the purchase contract is signed, not years into
a contract.").
These orders bear a direct relationship to power costs,
not only for the generators and the regulators but also for the
distributors, investors, and for the public consuming the energy.
Cf. N.Y. State Elec. & Gas Corp., 71 F.E.R.C. 61027, at *14 (1995)
(denying relief when petition presented "no legitimate reason . .
. to upset long-term contracts . . . which were the basis for the
financing and construction of the QF projects and under which the
parties have been providing and paying for service").
There is ample unrebutted evidence in the record of the
prejudicial effect on third-party consumers of Greenwood's delay in
bringing this suit. The PUC submitted the affidavit of Steven E.
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Mullen, a PUC utility analyst, which estimated the total cost
difference at issue to be at least $4.3 million over the ten-year
period.7
The PUC points out that PSNH will likely pass on the
costs of any judgment for Greenwood to its customers. Because its
customers from the period between the end of the modified rate
order in 2005 and the entry of judgment are not necessarily the
same customers as those after the entry of judgment, those new
customers would be paying additional costs for electricity they did
not necessarily use.
Given the extent of this reliance and the need for
stability, it is inherently unreasonable to permit a producer to
wait seventeen years to bring a preemption challenge to a state
rate order. It is even more inequitable to do so where a producer
earlier brought a timely partial challenge to a rate, did not then
raise a preemption challenge, and did not pursue judicial review.
7
The cost differential stems from both the cost of the
electricity itself as well as capacity charges owed Greenwood under
the original 1985 rate order. From the period since the end date
of the modified rate order in 2005 until 2006, PSNH compensated
Greenwood an average of $0.06 per kilowatt-hour, which was
approximately one-sixth the original 1985 rate order's rates for
2006. PSNH also stopped paying Greenwood capacity charges after
the end of the modified rate order, and the original 1985 rate
order would have required PSNH to pay capacity charges of $205.12
per kilowatt-year in 2006. Given the difference between market
rates and the rates set out in the original order, a cost
differential would likely persist until 2015, the final year of the
original order.
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Federal law has changed in the intervening years to
recognize the significant economic impact on utilities of the
mandatory obligations to purchase and sell electricity to QFs. The
Energy Policy Act of 2005 ends the mandate for an electric utility
to enter into new contracts with QFs to purchase or sell
electricity upon a finding by FERC that the QF has non-
discriminatory access to the market. Pub. L. No. 109-58,
§ 1253(a), 119 Stat. 594, 967-970 (2005); 16 U.S.C. § 824a-3(m).
(Existing contracts are not affected. 16 U.S.C. § 824a-3(m)(6).)
The judgment of the district court is reversed, and the
case is ordered dismissed with prejudice.
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