United States Court of Appeals
For the First Circuit
No. 05-1871
FPL ENERGY MAINE HYDRO LLC,
Petitioner,
v.
FEDERAL ENERGY REGULATORY COMMISSION,
Respondent.
__________
STATE OF MAINE,
Intervenor.
ON PETITION FOR REVIEW OF ORDERS OF THE
FEDERAL ENERGY REGULATORY COMMISSION
Before
Torruella, Boudin and Howard,
Circuit Judges.
John H. Montgomery with whom Jeffrey A. Thaler, Sarah B. Tracy
and Bernstein Shur were on brief for petitioner.
Jennifer Amerkhail with whom Cynthia A. Marlette, General
Counsel, and Robert H. Solomon, Solicitor, were on brief for
respondent.
Gerald D. Reid, Assistant Attorney General, Chief, Natural
Resources Division, with whom G. Steven Rowe, Attorney General, and
Paul Stern, Deputy Attorney General, were on brief for intervenor.
December 23, 2008
BOUDIN, Circuit Judge. FPL Energy Maine Hydro LLC
("FPL") owns a facility that provides hydroelectric generation and
flood control along the Kennebec River in Maine. The present
dispute grows out of FPL's effort to secure a renewal of an
operating license from the Federal Energy Regulatory Commission
("FERC") and its attempts to get a water quality certification from
the State of Maine, a necessary predicate for the renewal of the
license.
FPL's predecessor first obtained an operating license
from FERC in 1979. Before its license could be renewed by FERC,
section 401(a)(1) of the Clean Water Act required the applicant to
obtain certification by Maine that the project complied with
various state and federal water quality standards, or demonstrate
that Maine had waived certification by "fail[ing] or refus[ing] to
act on a request for certification" within one year. 33 U.S.C. §
1341(a)(1) (2006).
In December 1995, two years before its original license
was to expire, FPL's predecessor applied to FERC for renewal of the
license and sought water quality certification from Maine's Land
Use Regulation Commission (in subsequent years the application
would come before the Maine Department of Environmental Protection
("DEP")). Ordinarily, the DEP Commissioner makes an initial
decision, which can be appealed to the Department's Board of
Environmental Protection. The initial decision by the
-2-
Commissioner, or the Board's decision thereafter, can be appealed
to Maine's Superior Court. 38 M.R.S. §§ 344 (2-A), 346(1).1
On November 14, 2003 (the last day a decision could be
reached before the one-year deadline expired), the DEP Commissioner
granted FPL's petition for certification. Within thirty days, four
environmental groups appealed the DEP Commissioner's certification
to the DEP Board. A copy of the appeal was also filed with FERC on
December 10, 2003. The Environmental Protection Agency also
weighed in, filing comments with the DEP Board opposing the DEP
Commissioner's decision.
Thereafter, FERC issued FPL a thirty-two year renewal of
its federal license, relying solely on the DEP Commissioner's
decision, making no mention of the pending appeal. FPL Energy Me.
Hydro LLC, 106 F.E.R.C. ¶ 62,232, 2004 WL 628683 (Mar. 30, 2004).
Within the thirty-day limit provided for reconsideration, 18 C.F.R.
§ 385.713(b), Appalachian Mountain Club ("AMC") filed a timely
petition for rehearing of FERC's decision granting the license.
Then, two months after an April 1, 2004 meeting, the
Maine DEP Board issued an order rescinding the 2003 certification
without prejudice to a renewed application. FERC, advised of the
1
Each year, from 1996 to 2002, FPL's predecessor (and, when it
succeeded to ownership, FPL) filed an application for
certification, but then withdrew it before the DEP could act. In
2003, Maine's legislature adopted a new water quality standard for
so-called hydropower impoundments, see Resolves 2003, c. 137 (L.D.
1059), possibly beneficial to FPL.
-3-
DEP Board's denial of certification, granted the pending petition
for rehearing, and stayed the order granting FPL a new license.
FPL Energy Me. Hydro LLC, 108 F.E.R.C. ¶ 61,261, 2004 WL 2106361
(Sept. 21, 2004). FPL filed its own petition for rehearing before
FERC, which was later denied. 111 F.E.R.C. ¶ 61,104, 2005 WL
904387 (Apr. 19, 2005). AMC's own rehearing petition remains
pending before FERC.
FPL then filed two separate appeals: one, in the Maine
Superior Court, contested the DEP Board's rescission of the
certification; the other, in this court, sought review of FERC's
order staying its grant of a new license. This court held the
latter proceeding in abeyance pending the Maine court proceedings.
FPL eventually lost its challenge to the DEP Board decision, first
in the Maine Superior Court and then in the Maine Supreme Judicial
Court ("the SJC"). FPL Energy Me. Hydro LLC v. Maine Dep't of
Envtl. Prot., No. 04-50, 2006 WL 2587989 (Me. Super. Ct. May 25,
2006), aff'd, 926 A.2d 1197, 1199 (Me. 2007), cert. denied, 128 S.
Ct. 911 (2008).
In the state court proceedings, the Maine SJC rejected
three arguments by FPL: that the DEP Board action was invalid
because made more than a year after the request for certification,
or alternatively that the state waived certification by failing to
act within the required time period; that the Board applied an
incorrect standard in its water quality analysis; and that the
-4-
Board had erred in finding that the project did not meet the
relevant state water quality standards. FPL Energy Me. Hydro LLC,
926 A.2d at 1199. In the first ruling, FPL's main target on this
appeal, the court determined that the one-year time limitation was
satisfied by the DEP Commissioner's decision within the specified
period. Id. at 1203.
FPL's present challenge to FERC's stay of the license has
now gone forward in this court. Here, FPL argues that FERC erred
because the Board's action rescinding the certification violated
the CWA's one-year time limit and is a nullity, resulting in either
a waiver of certification or reinstatement of the DEP
Commissioner's certification. Alternatively, FPL says FERC failed
to recognize that it had discretion to disregard the DEP Board's
allegedly belated action and that the case should be remanded so
that it can exercise that discretion.
FERC, joined by Maine, questions our jurisdiction and
otherwise defends its actions on the merits. The jurisdictional
arguments, a threshold matter, are that FERC's stay of the license
is not ripe for judicial review or, alternatively, that FPL has
failed to demonstrate a sufficient injury to grant it standing
under Article III of the Constitution. The first issue is
"peculiarly a question of timing," Thomas v. Union Carbide Agric.
Prods. Co., 473 U.S. 568, 580 (1985) (quotation omitted); the
-5-
second, of impact, Save Our Heritage, Inc. v. FAA, 269 F.3d 49, 56
(1st Cir. 2001). We address them in order.
The ripeness doctrine aims to "prevent the courts,
through avoidance of premature adjudication, from entangling
themselves in abstract disagreements over administrative policies,
and also to protect the agencies from judicial interference until
an administrative decision has been formalized and its effects felt
in a concrete way by the challenging parties." Abbott Labs. v.
Gardner, 387 U.S. 136, 148-49 (1967). FERC's brief argues that the
agency has yet to "determine[] how it will treat Maine['s]
rescission of the 2003 Certification."
Yet FERC has twice said that it will not treat the CWA
one-year deadline as precluding the DEP Board from revisiting the
certification, although offering slightly different explanations.
Thus, in granting the stay, FERC recognized that section 401 of the
CWA requires a state agency to act on a request within one year,
but it concluded that "[i]n this case, the Maine DEP satisfied this
requirement by granting certification within the statutory time
period" and then continued:
There is nothing in the language of section
401 to suggest that a State must not only act
on the certification request but also take
action on any appeals that might subsequently
be filed within one year. Accordingly, we
cannot find that certification was waived.
2004 WL 2106361, at *2.
-6-
Subsequently, with the Maine court litigation underway,
FERC qualified its explanation, but not its result, in rejecting
FPL's request for rehearing. It said: "Issues concerning the
validity of state actions under section 401 are for state courts to
decide, and federal courts and agencies are without authority to
review these matters." 2005 WL 904387 at *3. The result is that
FERC has now twice declined to treat as untimely the DEP Board's
action in rescinding the certification, and that determination does
not appear to be provisional.
FERC's alternative jurisdictional objection is that FPL
has not yet suffered the "injury in fact" required for standing
under Article III. After all, FERC reasons, it has not dismissed
FPL's renewal application and has followed normal practice by
annually extending FPL's prior license while proceedings continue.
Accordingly, it argues that FPL has not been sufficiently harmed by
the stay to give it standing. Cf. Whitmore v. Arkansas, 495 U.S.
149, 158 (1990) ("possible future injury" is not enough for
prospective relief).
The standing requirement is meant to assure that a
litigant in federal court has a "concrete stake in a controversy."
Daggett v. Comm'n on Governmental Ethics & Election Practices, 172
F.3d 104, 109 (1st Cir. 1999). Although we are dealing only with
FERC's stay of its license renewal and not an outright rejection,
the result is that FPL now no longer has an effective, renewed
-7-
thirty-two year license. While it can temporarily continue
operations, it is (unless FERC unexpectedly alters its stay order)
hostage to further DEP Board proceedings in which the DEP Board has
considerable leverage to impose stiffer requirements.
So, as a legal matter, FPL no longer has the protection
of the thirty-two year license on the conditions previously adopted
by the DEP Commissioner; in practical terms, it probably has little
prospect of getting that license except on stricter terms. And all
this is apart from the additional cost and possible planning and
financial effects on a large utility with a now uncertain license.
We think that FPL has every incentive to litigate this case and
that its stake in the outcome is more than "concrete" enough for
Article III. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 562
(1992).
Jurisdiction being satisfied, it might seem that the time
has come to confront "the merits" of FPL's waiver argument. The
claim itself could easily present issues of state administrative
procedure and the interpretation of the CWA; and while the Maine
courts have the last word on the former, a federal court would not
be bound under Erie, Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78
(1938), to defer on issues of federal law. See Sola Elec. Co. v.
Jefferson Elec. Co., 317 U.S. 173, 176 (1942).
Nor is the outcome clear cut. In providing a one-year
time limit for state certification, Congress was obviously alert to
-8-
the concern that a state might otherwise unduly delay. The one-
year limit seemingly does not apply to state judicial review after
certification by a state agency, as both parties apparently agree;
but it is uncertain how the statute should be read where an
otherwise effective state agency decision on certification is
reached within one year but administrative review is available and
completed only after the year has elapsed.
Yet, the very same rescission issue was fully litigated
in the Maine SJC, which considered and rejected on the merits FPL's
explicit claim that section 401 barred the DEP Board's action. The
U.S. Supreme Court denied certiorari and the Maine SJC decision is
therefore final. See D.C. Ct. of App. v. Feldman, 460 U.S. 462,
476 (1983). It is not Erie but res judicata principles that bar us
from reexamining the Maine courts' decision that the DEP Board
validly rescinded the certificate.
A federal court is generally bound under res judicata to
give the same preclusive effect to a state court judgment as would
be given to it by a local court within that state.2 This is true
"regardless whether the state-court decision involves federal or
2
See, e.g., Penobscot Nation v. Georgia-Pacific Corp., 254
F.3d 317, 323 (1st Cir. 2001), cert. denied, 534 U.S. 1127 (2002);
Felix Davis v. Vieques Air Link, 892 F.2d 1122, 1124 (1st Cir.
1990). The rule reflects both federal common law principles and 28
U.S.C. § 1738, the latter of which has been read to require that
"all federal courts . . . give preclusive effect to state-court
judgments whenever the courts of the State from which the judgments
emerged would do so." Allen v. McCurry, 449 U.S. 90, 96 (1980).
-9-
state law." Penobscot Nation, 254 F.3d at 323 (citing Cruz v.
Melecio, 204 F.3d 14, 18 (1st Cir. 2000)). So the question is not
whether we are bound generally to read section 401 as Maine has
done but whether we can reexamine its conclusion in this case as
applied to the specific DEP Board action taken in this instance.
See Kremer v. Chem. Constr. Co., 456 U.S. 461 (1982) (applying res
judicata to state-court judgment in review of state administrative
agency determination).
Maine law requires that for res judicata to apply that
"the identical issue was determined by a prior final judgment, and
that the party estopped had a fair opportunity and incentive to
litigate the issue in the prior proceeding." Van Houten v. Harco
Constr., Inc., 655 A.2d 331, 333 (Me. 1995) (internal quotation
mark and citation omitted). FPL all but concedes that its present
section 401 arguments were made and rejected by the Maine SJC but
it argues that the case invokes two recognized "exceptions" to the
principles of res judicata.
The first exception FPL invokes is one allowing a court
to disregard res judicata where the public interest so requires.
Restatement (Second) of Judgments § 28(5) (1982). While Maine's
view of the exception is narrower than that set forth in the
Restatement, Wells v. State, 474 A.2d 846, 850 (Me. 1984)(limiting
exception to "extreme and rare case[s]"), FPL would not prevail
even if Maine followed the Restatement formulation, which still
-10-
requires a "clear and convincing [showing]. . . of the potential
adverse impact of the determination on the public interest."
Restatement, supra, § 28(5).
The only effect of preclusion here is that we do not
address on the merits, on review of this stay order in this case,
the underlying FPL claim that the DEP Board's rescission of the
certificate violated the CWA one year deadline. This leaves the
stay order in effect but FPL fails to show that this single event
adversely affects the public interest. Res judicata in this case
does not lock us or any other federal court into a specific reading
of section 401. If the Maine SJC's reading is wrong--which is far
from certain--that can be addressed when the issue next arises.
FPL complains that because the Maine SJC relied on FERC's
own gloss on section 401 offered in granting the stay, res judicata
effectively deprives FPL of its ordinary opportunity to get a FERC
order reviewed on the merits in a federal circuit court. But the
right to a federal forum does not automatically dispense with res
judicata or other ordinary limitations on review. Migra v. Warren
City Sch. Dist. Bd. of Ed., 465 U.S. 75, 84-85 (1984). Anyway, FPL
is the one that chose to raise the federal issue in state court in
the first place. As in England v. La. State Bd. of Med. Exam'rs.,
375 U.S. 411 (1964),
we see no reason why a party, after
unreservedly litigating his federal claims in
the state courts although not required to do
so, should be allowed to ignore the adverse
-11-
state decision and start all over again in
[federal court].
Id. at 424.
FPL also gets no help from a second Restatement
exception, see Bath Iron Works Corp. v. Dir., Office of Workers'
Comp., 125 F.3d 18, 21-22 (1st Cir. 1997) (assuming that Maine
courts would apply exception); In re Michaela C., 809 A.2d 1245,
1257 (Me. 2002) (discussing exception in dissenting opinion), cert.
denied sub. nom., Corbin v. Me. Dep't. of Human Servs., 538 U.S.
931 (2003), where "[t]he party against whom preclusion is sought
had a significantly heavier burden of persuasion with respect to
the issue in the initial action than in the subsequent action."
Restatement, supra, § 28(4).
This exception is designed to protect a party from res
judicata where the party failed to carry the burden of proof in an
earlier proceeding but the burden there was heavier than it would
be in the new proceeding. Restatement, supra, § 28(4) cmt. f. But
FPL has not shown, and cannot show, that the standard of review
applicable to such a legal claim was any different in the Maine SJC
than it would be if we were considering the legal issue itself.
FPL next argues that however section 401 may be read,
FERC cannot by its stay order undue a license already granted. FPL
says in substance that under FERC's governing statute and pertinent
case law, FERC has no power to modify a final FERC license without
the licensee's consent. 16 U.S.C. § 799 (licenses "may be altered
-12-
or surrendered only upon mutual agreement between the licensee and
the Commission after thirty days' public notice."); Keating v.
FERC, 927 F.2d 616, 623 (D.C. Cir. 1991).
Yet so far FERC has not modified the license but simply
stayed its order granting the license pending reconsideration. Its
authority to revisit the grant of a license in response to a timely
petition for reconsideration can hardly be open to question.
Henwood Assocs., Inc., 50 F.E.R.C. ¶ 61,183, 61,548 (Feb. 15,
1990), aff'd in part, vacated in part on other grounds, Cal. v.
FERC, 966 F.2d 1541 (9th Cir. 1992). Whether FERC could "stay" a
license after the period for reconsideration had lapsed is an issue
not presented here.
Lastly, arguing in the alternative and relying on our
decision in Puerto Rico Sun Oil Co. v. EPA, 8 F.3d 73 (1st Cir.
1993), FPL argues that FERC misconstrued its own powers by failing
to recognize that it had authority to accept or disregard the DEP
Board's action precisely because it was untimely. FPL says,
therefore, that the stay order should at the very least be remanded
to FERC so it can rule again on the stay application with an
awareness that it can disregard the rescission of the
certification.
Sun Oil does say that the responsible federal agency--
there it was the EPA--is free to disregard an untimely state
certification action under section 401, id. at 79; but the premise
-13-
of FPL's argument is that in this case, as was unquestionably true
in Sun Oil, id. at 75-76, the state's action was untimely. This is
the very premise that the Maine SJC rejected and (as we have
explained) the Maine SJC's contrary determination that the DEP
Board's rescission was timely binds FPL in this court.
The petition to review FERC's stay order is denied.
-14-